| 3 | | - | Senate File 574, p. 2 operations. 1A. Agricultural land means the same as defined in section 91.1. 2. Base employment level means the number of full-time equivalent positions at a business, as established by the authority and the business using the businesss payroll records, as of the date the business applies for tax incentives under the program. 3. Benefit means nonwage compensation provided to an employee. Benefits include medical and dental insurance, a pension, a retirement plan, a profit-sharing plan, child care, life insurance, vision insurance, and disability insurance. 4. Certified site means a site that has been issued a certificate of readiness by the authority pursuant to section 15E.18. 5. Community means a city, county, or entity established pursuant to chapter 28E. 6. Contract completion means the date of completion of the terms of a contract between a contractor and an eligible business. 7. Contractor means a person that has executed a contract with an eligible business for the provision of property, materials, or services for the construction or equipping of a facility that is part of the eligible businesss project. 8. Created jobs or create jobs means new, permanent, full-time equivalent positions added to an eligible businesss payroll, at the location of the eligible businesss project, in excess of the eligible businesss base employment level. 9. Data center business means the same as defined in section 423.3, subsection 95. 10. Eligible business means a business that meets the requirements of section 15.492. 10A. Foreign adversary means a foreign government or foreign non-government person as determined in 15 C.F.R. 7.4, and that is listed in 15 C.F.R. 7.4(a) at any time from March 4, 2024, through the termination of the program. 10B. Foreign adversary entity means any of the following: a. A foreign business subject to the jurisdiction of or organized under the laws of a foreign adversary. |
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| 3 | + | S.F. 574 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 1228SV (2) 90 ko/jh 1/ 21 |
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| 5 | | - | Senate File 574, p. 3 b. A foreign business owned, directed, or controlled by a foreign adversary. 11. Foreign business means the same as defined in section 9I.1. 12. 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. 13. Maintenance period means the period of time between the project completion date and the maintenance period completion date during which an eligible business must maintain all created jobs per the agreement under section 15.494. 14. Maintenance period completion date means the date on which the maintenance period ends. 15. Mega site means a certified site greater than one thousand acres. 16. Program means the major economic growth attraction program. 17. Project means an activity or set of activities directly related to the start-up or location of an eligible business, proposed in an eligible businesss application to the program, that will accomplish the goals of the program. 18. Project completion date means the date by which an eligible business that has been approved by the authority to participate in the program agrees to complete the terms and conditions of the agreement under section 15.494. 19. Project completion period means the period of time between the date the authority approves an eligible business to participate in the program and the project completion date. 20. Qualifying investment means a capital investment in real property, including the purchase price of the land, site preparation, infrastructure, and building construction for use in the operation of an eligible business. Qualifying investment also means a capital investment in depreciable assets for use in the operation of an eligible business. 21. Qualifying wage threshold means the mean wage level |
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| 5 | + | S.F. 574 (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. Making or taking part in making decisions contributing to 16 or affecting the success of a farms operations. 17 c. Entering into a contractual relationship with an 18 outside entity to farm agricultural land as part of a farms 19 operations. 20 2. Base employment level means the number of full-time 21 equivalent positions at a business, as established by the 22 authority and the business using the businesss payroll 23 records, as of the date the business applies for tax incentives 24 under the program. 25 3. Benefit means nonwage compensation provided to an 26 employee. Benefits include medical and dental insurance, a 27 pension, a retirement plan, a profit-sharing plan, child care, 28 life insurance, vision insurance, and disability insurance. 29 4. Certified site means a site that has been issued a 30 certificate of readiness by the authority pursuant to section 31 15E.18. 32 5. Community means a city, county, or entity established 33 pursuant to chapter 28E. 34 6. Contract completion means the date of completion of 35 -2- LSB 1228SV (2) 90 ko/jh 2/ 21 |
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| 7 | | - | Senate File 574, p. 4 represented by the wages within two standard deviations of 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 in which the eligible business is located. 22. Subcontractor means a person that contracts with a contractor for the provision of property, materials, or services for the construction or equipping of a facility that is part of an eligible businesss project. 23. Tax incentives means tax credits, tax refunds, or tax exemptions authorized under the program by the authority for an eligible business. Sec. 4. NEW SECTION . 15.492 Eligible business. 1. To be eligible to receive tax incentives under the program, a business must meet all of the following requirements: a. The businesss proposed project must be located on a site where the business has a controlling interest in or a certified site greater than two hundred fifty acres. The authority must determine a site is suitable for the project. b. The businesss qualifying investment in the proposed project must exceed one billion dollars. c. The community in which the proposed project is located must approve the project either by ordinance or resolution. d. (1) The business must be primarily engaged in advanced manufacturing, biosciences, or research and development. The business shall not be a data center business, a retail business, or a business where a cover charge or membership requirement restricts certain individuals from entering the business. (2) Factors the authority shall consider to determine if a business is primarily engaged in advanced manufacturing, biosciences, or research and development shall include but are not limited to all of the following: (a) The businesss North American industry classification system code. (b) The businesss main sources of revenue. (c) The businesss customer base. |
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| 7 | + | S.F. 574 the terms of a contract between a contractor and an eligible 1 business. 2 7. Contractor means a person that has executed a contract 3 with an eligible business for the provision of property, 4 materials, or services for the construction or equipping of a 5 facility that is part of the eligible businesss project. 6 8. Created jobs or create jobs means new, permanent, 7 full-time equivalent positions added to an eligible businesss 8 payroll, at the location of the eligible businesss project, in 9 excess of the eligible businesss base employment level. 10 9. Data center business means the same as defined in 11 section 423.3, subsection 95. 12 10. Eligible business means a business that meets the 13 requirements of section 15.283. 14 11. Foreign business means the same as defined in section 15 9I.1. 16 12. Full-time equivalent position means a non-part-time 17 position for the number of hours or days per week considered 18 to be full-time work for the kind of service or work performed 19 for an employer. Typically, a full-time equivalent position 20 requires two thousand eighty hours of work in a calendar year, 21 including all paid holidays, vacations, sick time, and other 22 paid leave. 23 13. Maintenance period means the period of time between 24 the project completion date and the maintenance period 25 completion date during which an eligible business must maintain 26 all created jobs per the agreement under section 15.285. 27 14. Maintenance period completion date means the date on 28 which the maintenance period ends. 29 15. Mega site means a certified site greater than one 30 thousand acres. 31 16. Program means the major economic growth attraction 32 program. 33 17. Project means an activity or set of activities 34 directly related to the start-up or location of an eligible 35 -3- LSB 1228SV (2) 90 ko/jh 3/ 21 |
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| 9 | | - | Senate File 574, p. 5 e. (1) The business must not be solely relocating operations from one area of the state to another area of the state. A proposed project that does not create jobs or involve a substantial amount of new capital investment shall be presumed to be a relocation of operations. For purposes of this subparagraph, the authority shall consider a letter from the affected local communitys government officials supporting the businesss move away from the affected local community in making a determination whether the business is solely relocating operations. (2) This paragraph shall not be construed to prohibit a business from expanding the businesss operations in a community if the business has similar operations in this state that are not closing or undergoing a substantial reduction in operations. f. The business must create jobs as part of the businesss proposed project. The business must demonstrate that the created jobs will pay at least one hundred forty percent of the qualifying wage threshold by the project completion date, and through the maintenance period completion date. g. The business must provide comprehensive benefits to each employee employed in a created job. The authority may adopt rules under chapter 17A to determine the requirements for comprehensive benefits. h. (1) The business must not have a record of violations of the law or of regulations, including but not limited to antitrust, environmental, trade, or worker safety, that over a period of time show a consistent pattern or that establish the businesss intentional, criminal, or reckless conduct in violation of such laws or regulations. (2) If the authority determines that the business has a record of violations described in subparagraph (1), and the authority finds that the violations did not seriously affect public health, public safety, or the environment, the business may be eligible to qualify for the program. (3) If the authority determines that the business has a record of violations described in subparagraph (1), and the authority finds that there were mitigating circumstances related to the violations, the business may be eligible to |
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| 9 | + | S.F. 574 business, proposed in an eligible businesss application to the 1 program, that will accomplish the goals of the program. 2 18. Project completion date means the date by which an 3 eligible business that has been approved by the authority to 4 participate in the program agrees to complete the terms and 5 conditions of the agreement under section 15.285. 6 19. Project completion period means the period of time 7 between the date the authority approves an eligible business to 8 participate in the program and the project completion date. 9 20. Qualifying investment means a capital investment 10 in real property located on a certified site, including the 11 purchase price of the land, site preparation, infrastructure, 12 and building construction for use in the operation of an 13 eligible business. Qualifying investment also means a capital 14 investment in depreciable assets for use in the operation of an 15 eligible business. 16 21. Qualifying wage threshold means the mean wage level 17 represented by the wages within two standard deviations of 18 the mean wage within the laborshed area in which the eligible 19 business is located, as calculated by the authority by rule, 20 using the most current covered wage and employment data 21 available from the department of workforce development for the 22 laborshed area in which the eligible business is located. 23 22. Subcontractor means a person that contracts with 24 a contractor for the provision of property, materials, or 25 services for the construction or equipping of a facility that 26 is part of an eligible businesss project. 27 23. Tax incentives means tax credits, tax refunds, or tax 28 exemptions authorized under the program by the authority for an 29 eligible business. 30 Sec. 4. NEW SECTION . 15.283 Eligible business. 31 1. To be eligible to receive tax incentives under 32 the program, a business must meet all of the following 33 requirements: 34 a. The businesss proposed project must be located on a 35 -4- LSB 1228SV (2) 90 ko/jh 4/ 21 |
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| 13 | | - | Senate File 574, p. 7 Sec. 5. NEW SECTION . 15.493 Applications authorization of tax credits and exemptions. 1. Applications for the program shall be submitted to the authority in the form and manner prescribed by the authority by rule. Each application must be accompanied by an application fee in an amount determined by the authority by rule. 2. In determining the eligibility of a business to participate in the program, the authority may engage outside experts to complete a technical, financial, or other review of an application submitted by a business if such review is outside the expertise of the authority. 3. a. The authority and the board may negotiate with an eligible business regarding the terms of, and the aggregate value of, the tax incentives the eligible business may receive under the program. b. The board may authorize any combination of tax incentives available under the program for an eligible business. 4. The board may authorize an exemption to restrictions on agricultural land holdings if all of the requirements of section 15.498 are met. Sec. 6. NEW SECTION . 15.494 Agreement. 1. An eligible business that is approved by the authority to participate in the program shall enter into an agreement with the authority that specifies the criteria for the successful completion of all requirements of the program. The agreement must contain, at a minimum, provisions related to all of the following: a. The eligible business must certify to the authority annually that the business is in compliance with the agreement. b. If the eligible business fails to comply with any requirements of the program or the agreement, the eligible business may be required to repay any tax incentives the authority issued to the eligible business. A required repayment of a tax incentive shall be considered a tax payment due and payable to the department of revenue by any taxpayer that claimed the tax incentive, and the failure to make the repayment may be treated by the department of revenue in the same manner as a failure to pay the tax shown due, or required to be shown due, with the filing of a return or deposit form. |
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| 13 | + | S.F. 574 f. The business must create jobs as part of the businesss 1 proposed project. The business must demonstrate that the 2 created jobs will pay at least one hundred forty percent of the 3 qualifying wage threshold by the project completion date, and 4 through the maintenance period completion date. 5 g. The business must provide comprehensive benefits to 6 each employee employed in a created job. The authority may 7 adopt rules under chapter 17A to determine the requirements for 8 comprehensive benefits. 9 h. (1) The business must not have a record of violations 10 of the law or of regulations, including but not limited to 11 antitrust, environmental, trade, or worker safety, that over 12 a period of time show a consistent pattern or that establish 13 the businesss intentional, criminal, or reckless conduct in 14 violation of such laws or regulations. 15 (2) If the authority determines that the business has a 16 record of violations described in subparagraph (1), and the 17 authority finds that the violations did not seriously affect 18 public health, public safety, or the environment, the business 19 may be eligible to qualify for tax incentives, and an exemption 20 under section 9I.3, subsection 3, paragraph f , under the 21 program. 22 (3) If the authority determines that the business has 23 a record of violations described in subparagraph (1), and 24 the authority finds that there were mitigating circumstances 25 related to the violations, the business may be eligible to 26 qualify for tax incentives under the program. 27 (4) In making determinations and findings under 28 subparagraphs (2) and (3), and making a determination whether a 29 business is disqualified from the program, the authority shall 30 be exempt from chapter 17A. 31 2. a. In determining if a business is eligible to 32 participate in the program, the authority shall consider a 33 variety of factors, including but not limited to all of the 34 following: 35 -6- LSB 1228SV (2) 90 ko/jh 6/ 21 |
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| 17 | | - | Senate File 574, p. 9 board. 5. The authority may enforce the terms of the agreement as necessary and appropriate. Sec. 7. NEW SECTION . 15.495 Sales and use tax refund. 1. An eligible business that has been issued a tax incentive certificate under the program shall be entitled to a refund of the sales and use taxes paid under chapter 423 for gas, electricity, water, and sewer utility services, tangible personal property, or on services rendered, furnished, or performed to or for a contractor or subcontractor and used in the fulfillment of a written contract for the construction or equipping of a facility that is part of the eligible businesss project. Taxes attributable to intangible property and furniture and furnishings shall not be refunded. 2. To receive the sales and use tax refund, the eligible business shall file a claim with the department of revenue as follows: a. The contractor or subcontractor shall state under oath, on forms provided by the department of revenue, the amount of the sales of tangible personal property or services rendered, furnished, or performed including water, sewer, gas, and electric utility services upon which sales or use tax has been paid prior to contract completion, and shall submit the forms to the eligible business before contract completion. b. The eligible business shall inform the department of revenue in writing of contract completion. The eligible business shall, after contract completion, submit an application to the department of revenue for a refund of the amount of the sales and use taxes paid pursuant to chapter 423 upon any tangible personal property, or services rendered, furnished, or performed, including water, sewer, gas, and electric utility services. The application shall be submitted in the form and manner prescribed by the department of revenue. The department of revenue shall audit the application and, if approved, issue a warrant or warrants to the eligible business in the amount of the sales or use tax which has been paid to the state of Iowa under subsection 1. The eligible businesss application must be submitted to the department of revenue within one year after the project completion date. An |
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| 17 | + | S.F. 574 fee in an amount determined by the authority by rule. 1 2. In determining the eligibility of a business to 2 participate in the program, the authority may engage outside 3 experts to complete a technical, financial, or other review 4 of an application submitted by a business if such review is 5 outside the expertise of the authority. 6 3. a. The authority and the board may negotiate with an 7 eligible business regarding the terms of, and the aggregate 8 value of, the tax incentives the eligible business may receive 9 under the program. 10 b. The board may authorize any combination of tax incentives 11 available under the program for an eligible business. 12 4. The board may authorize an exemption to restrictions on 13 agricultural land holdings pursuant to section 9I.3, subsection 14 3, paragraph f . 15 Sec. 6. NEW SECTION . 15.285 Agreement. 16 1. An eligible business that is approved by the authority to 17 participate in the program shall enter into an agreement with 18 the authority that specifies the criteria for the successful 19 completion of all requirements of the program. The agreement 20 must contain, at a minimum, provisions related to all of the 21 following: 22 a. The eligible business must certify to the authority 23 annually that the business is in compliance with the agreement. 24 b. If the eligible business fails to comply with any 25 requirements of the program or the agreement, the eligible 26 business may be required to repay any tax incentives the 27 authority issued to the eligible business. A required 28 repayment of a tax incentive shall be considered a tax payment 29 due and payable to the department of revenue by any taxpayer 30 that claimed the tax incentive, and the failure to make the 31 repayment may be treated by the department of revenue in the 32 same manner as a failure to pay the tax shown due, or required 33 to be shown due, with the filing of a return or deposit form. 34 c. If the eligible business undergoes a layoff or 35 -8- LSB 1228SV (2) 90 ko/jh 8/ 21 |
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| 19 | | - | Senate File 574, p. 10 application filed by the eligible business in accordance with this section shall not be denied by reason of a limitation set forth in chapter 421 or 423. c. The refund shall be remitted by the department of revenue to the eligible business equally over five tax years. Interest shall not accrue on any part of the refund that has not yet been remitted by the department of revenue to the eligible business. 3. A contractor or subcontractor that willfully makes a false report of tax paid under this section is guilty of an aggravated misdemeanor, and shall be liable for payment of the tax and any applicable penalty and interest. Sec. 8. NEW SECTION . 15.496 Qualifying investment tax credit. 1. The authority may authorize a tax credit for an eligible business that is up to five percent of the eligible businesss qualifying investment. The authority shall not issue a tax credit certificate to the eligible business until the eligible businesss project has been placed in service, and at least fifty percent of the created jobs the eligible business agreed to in the agreement under section 15.494, and that pay at least one hundred forty percent of the qualifying wage threshold, have been added to the eligible businesss payroll. The department of revenue shall remit the tax credit to the eligible business equally over five tax years. The tax credit shall be allowed against taxes imposed under chapter 422, subchapter II, III, or V, and against the moneys and credits tax imposed in section 533.329. If the eligible business is a partnership, S corporation, limited liability company, cooperative organized under chapter 501 and filing as a partnership for federal tax purposes, or estate or trust electing to have the income taxed directly to the individual, an individual may claim the tax credit allowed. The amount claimed by the individual shall be based upon the pro rata share of the individuals earnings of the partnership, S corporation, limited liability company, cooperative organized under chapter 501 and filing as a partnership for federal tax purposes, or estate or trust. Any tax credit in excess of the eligible businesss tax liability for the tax year may be refunded or, at the eligible businesss election, credited to |
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| 19 | + | S.F. 574 permanently closes any of its facilities within the state, the 1 eligible business may be subject to all of the following: 2 (1) A reduction or elimination of some or all of the tax 3 incentives the authority issued to the eligible business. 4 (2) Repayment of any tax incentives that the business 5 has claimed, and payment of any penalties assessed by the 6 department of revenue. 7 d. The project completion date, the maintenance period 8 completion date, the required number of created jobs, the 9 qualifying wage threshold that is applicable to the project, 10 the amount of qualifying investment, the maximum aggregate 11 value of the tax incentives authorized by the board, and any 12 other terms and obligations the authority deems necessary. 13 e. The eligible business shall only employ individuals 14 legally authorized to work in this state. If the eligible 15 business is found to knowingly employ individuals who are 16 not legally authorized to work in this state, in addition 17 to any penalties provided by law, all or a portion of any 18 tax incentives issued by the authority shall be subject to 19 recapture by the authority or the department of revenue. 20 f. The maximum amount of gross wages, not to exceed three 21 percent, that the eligible business may withhold under section 22 15.286B, and the time period, not to exceed the term of the 23 agreement, during which the specified amount of gross wages may 24 be withheld. 25 g. Any terms deemed necessary by the authority to effect the 26 eligible businesss ongoing compliance with section 15.283. 27 2. The business shall satisfy all applicable terms of 28 the agreement by the project completion date; however, the 29 board may for good cause extend the project completion date or 30 otherwise amend the terms of the agreement. The board shall 31 not amend the terms of the agreement to allow an increase in 32 the maximum aggregate value of the tax incentives authorized by 33 the board under section 15.284, subsection 3. 34 3. The eligible business shall comply with all applicable 35 -9- LSB 1228SV (2) 90 ko/jh 9/ 21 |
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| 21 | | - | Senate File 574, p. 11 the eligible businesss tax liability in any of the following five consecutive tax years or until depleted, whichever occurs first. The eligible business shall make such election prior to the authority issuing a tax credit certificate to the eligible business, and the eligible businesss election shall be noted on the tax credit certificate. A tax credit shall not be carried back to a tax year prior to the tax year in which the tax credit is first claimed by the eligible business. 2. If within five years of the date the authority issues an eligible business a tax credit under subsection 1, the eligible business sells, disposes of, razes, or otherwise renders unusable all or a part of the land, buildings, or other structures for which the tax credit was claimed under this section, the tax liability of the eligible business for the year in which all or part of the land, buildings, or other existing structures are sold, disposed of, razed, or otherwise rendered unusable shall be increased by one of the following amounts: a. One hundred percent of the tax credit claimed under this section if all or a part of the land, buildings, or other structures for which the tax credit was claimed under this section cease to be eligible for the tax credit within one year after the date the authority issued the tax credit to the eligible business. b. Eighty percent of the tax credit claimed under this section if all or a part of the land, buildings, or other structures for which the tax credit was claimed under this section cease to be eligible for the tax credit within two years after the date the authority issued the tax credit to the eligible business. c. Sixty percent of the tax credit claimed under this section if all or a part of the land, buildings, or other structures for which the tax credit was claimed under this section cease to be eligible for the tax credit within three years after the date the authority issued the tax credit to the eligible business. d. Forty percent of the tax credit claimed under this section if all or a part of the land, buildings, or other structures for which the tax credit was claimed under this |
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| 21 | + | S.F. 574 terms of the agreement during the maintenance period. 1 4. The eligible business shall not assign the agreement 2 to another entity without the advance written approval of the 3 board. 4 5. The authority may enforce the terms of the agreement as 5 necessary and appropriate. 6 Sec. 7. NEW SECTION . 15.286 Sales and use tax refund. 7 1. An eligible business that has been issued a tax incentive 8 certificate under the program shall be entitled to a refund 9 of the sales and use taxes paid under chapter 423 for gas, 10 electricity, water, and sewer utility services, tangible 11 personal property, or on services rendered, furnished, or 12 performed to or for a contractor or subcontractor and used in 13 the fulfillment of a written contract for the construction or 14 equipping of a facility that is part of the eligible businesss 15 project. Taxes attributable to intangible property and 16 furniture and furnishings shall not be refunded. 17 2. To receive the sales and use tax refund, the eligible 18 business shall file a claim with the department of revenue as 19 follows: 20 a. The contractor or subcontractor shall state under oath, 21 on forms provided by the department of revenue, the amount of 22 the sales of tangible personal property or services rendered, 23 furnished, or performed including water, sewer, gas, and 24 electric utility services upon which sales or use tax has been 25 paid prior to contract completion, and shall submit the forms 26 to the eligible business before contract completion. 27 b. The eligible business shall inform the department of 28 revenue in writing of contract completion. The eligible 29 business shall, after contract completion, submit an 30 application to the department of revenue for a refund of the 31 amount of the sales and use taxes paid pursuant to chapter 423 32 upon any tangible personal property, or services rendered, 33 furnished, or performed, including water, sewer, gas, and 34 electric utility services. The application shall be submitted 35 -10- LSB 1228SV (2) 90 ko/jh 10/ 21 |
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| 23 | | - | Senate File 574, p. 12 section cease to be eligible for the tax credit within four years after the date the authority issued the tax credit to the eligible business. e. Twenty percent of the tax credit claimed under this section if all or a part of the land, buildings, or other structures for which the tax credit was claimed under this section cease to be eligible for the tax credit within five years after the date the authority issued the tax credit to the eligible business. Sec. 9. NEW SECTION . 15.497 Withholding tax credit. 1. From the remittance due to the department of revenue pursuant to section 422.16, an eligible business may withhold an amount, pursuant to section 15.494, subsection 1, paragraph f , of the gross wages paid to each employee in a created job that pays at least the qualifying wage threshold pursuant to the agreement under section 15.494. 2. If the amount withheld under subsection 1 is less than three percent of the gross wages paid to each employee in a created job that pays at least one hundred forty percent of the qualifying wage threshold, the eligible business shall receive a credit against the remaining withholding taxes due from the eligible business, or the eligible business may carry the credit forward up to five consecutive tax years or until depleted, whichever is earlier. 3. In any tax year, the aggregate amount of withholding tax credit under this section and under any other program for which an eligible business is receiving a withholding tax credit shall not exceed the amount the eligible business is required to deduct and remit to the department of revenue under section 422.16 for that tax year. Sec. 10. NEW SECTION . 15.498 Foreign businesses acquisition of agricultural land. 1. The board may authorize an exemption to restrictions on agricultural land holdings for a foreign business if all of the following requirements are satisfied: a. The foreign business qualifies as an eligible business pursuant to section 15.492. b. As part of the application of the foreign business under section 15.493, the foreign business provides documentation |
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| 23 | + | S.F. 574 in the form and manner prescribed by the department of revenue. 1 The department of revenue shall audit the application and, 2 if approved, issue a warrant or warrants to the eligible 3 business in the amount of the sales or use tax which has been 4 paid to the state of Iowa under subsection 1. The eligible 5 businesss application must be submitted to the department of 6 revenue within one year after the project completion date. An 7 application filed by the eligible business in accordance with 8 this section shall not be denied by reason of a limitation set 9 forth in chapter 421 or 423. 10 c. The refund shall be remitted by the department of revenue 11 to the eligible business equally over five tax years. Interest 12 shall not accrue on any part of the refund that has not yet been 13 remitted by the department of revenue to the eligible business. 14 3. A contractor or subcontractor that willfully makes a 15 false report of tax paid under this section is guilty of an 16 aggravated misdemeanor, and shall be liable for payment of the 17 tax and any applicable penalty and interest. 18 Sec. 8. NEW SECTION . 15.286A Qualifying investment tax 19 credit. 20 1. The authority may authorize a tax credit for an eligible 21 business that is up to five percent of the eligible businesss 22 qualifying investment in a certified site. The authority shall 23 not issue a tax credit certificate to the eligible business 24 until the eligible businesss project has been placed in 25 service, and at least fifty percent of the created jobs the 26 eligible business agreed to in the agreement under section 27 15.285, and that pay at least one hundred forty percent of the 28 qualifying wage threshold, have been added to the eligible 29 businesss payroll. The department of revenue shall remit 30 the tax credit to the eligible business equally over five tax 31 years. The tax credit shall be allowed against taxes imposed 32 under chapter 422, subchapter II, III, or V, and against the 33 moneys and credits tax imposed in section 533.329. If the 34 eligible business is a partnership, S corporation, limited 35 -11- LSB 1228SV (2) 90 ko/jh 11/ 21 |
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| 25 | | - | Senate File 574, p. 13 to the authority, as deemed necessary by the authority, to establish that the foreign business is not associated with a foreign adversary or foreign adversary entity. c. The agricultural land for which the exemption is provided is a mega site or included in a mega site. d. The foreign business is not actively engaged in farming. 2. a. A foreign business under subsection 1 that is approved by the authority to participate in the program shall enter into an agreement with the authority pursuant to section 15.494. The agreement shall include a provision that requires the foreign business to comply with chapter 9I, and specifies that failure to do so may result in revocation of all tax incentives issued by the authority to the foreign business. b. The authority may grant the foreign business one or more one-year extensions in which the foreign business must comply with section 9I.4. The authority shall not grant more than five one-year extensions. The community in which the agricultural land is located must approve each one-year extension by ordinance or resolution prior to the authority granting each extension. The foreign business shall comply with the remaining provisions of chapter 9I to the extent the provisions do not conflict with this section. Sec. 11. NEW SECTION . 15.499 Other incentives. 1. Except for the high quality jobs program administered by the authority pursuant to sections 15.326 through 15.336, and the targeted jobs withholding credit pursuant to section 403.19A, an eligible business may apply for and be eligible to receive other federal, state, and local incentives in addition to the tax incentives issued by the authority to the eligible business under the program. 2. The authority, in its discretion, may prohibit an eligible business that has been issued tax incentives under the program from receiving any additional tax incentive, tax credit, grant, loan, or other financial assistance under any program administered by the authority. Sec. 12. NEW SECTION . 15.500 Property tax exemption. 1. A community in which an eligible businesss project is located may grant the eligible business a property tax exemption for a portion of the actual value added by |
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| 25 | + | S.F. 574 liability company, cooperative organized under chapter 501 and 1 filing as a partnership for federal tax purposes, or estate 2 or trust electing to have the income taxed directly to the 3 individual, an individual may claim the tax credit allowed. 4 The amount claimed by the individual shall be based upon the 5 pro rata share of the individuals earnings of the partnership, 6 S corporation, limited liability company, cooperative organized 7 under chapter 501 and filing as a partnership for federal tax 8 purposes, or estate or trust. Any tax credit in excess of 9 the eligible businesss tax liability for the tax year may be 10 refunded or, at the eligible businesss election, credited to 11 the eligible businesss tax liability in any of the following 12 five consecutive tax years or until depleted, whichever occurs 13 first. The eligible business shall make such election prior to 14 the authority issuing a tax credit certificate to the eligible 15 business, and the eligible businesss election shall be noted 16 on the tax credit certificate. A tax credit shall not be 17 carried back to a tax year prior to the tax year in which the 18 tax credit is first claimed by the eligible business. 19 2. If within five years of the date the authority issues 20 an eligible business a tax credit under subsection 1, the 21 eligible business sells, disposes of, razes, or otherwise 22 renders unusable all or a part of the land, buildings, or 23 other structures for which the tax credit was claimed under 24 this section, the tax liability of the eligible business for 25 the year in which all or part of the land, buildings, or other 26 existing structures are sold, disposed of, razed, or otherwise 27 rendered unusable shall be increased by one of the following 28 amounts: 29 a. One hundred percent of the tax credit claimed under 30 this section if all or a part of the land, buildings, or other 31 structures for which the tax credit was claimed under this 32 section cease to be eligible for the tax credit within one 33 year after the date the authority issued the tax credit to the 34 eligible business. 35 -12- LSB 1228SV (2) 90 ko/jh 12/ 21 |
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| 27 | | - | Senate File 574, p. 14 improvements to real property directly related to the eligible businesss created jobs. The community may allow a property tax exemption for a period not to exceed twenty years beginning the year that the improvements to real property are first assessed for taxation. 2. For purposes of this section, improvements means new construction, and rehabilitation of and additions to existing structures. 3. A property tax exemption granted under subsection 1 shall apply to all taxing districts, except for school districts, in which the real property is located. Sec. 13. NEW SECTION . 15.501 Restrictions on board. The board shall not authorize tax incentives available under the program, or an exemption to restrictions on agricultural land holdings pursuant to this part, for more than two eligible businesses, or on or after January 1, 2027, whichever occurs first. DIVISION II CERTIFIED SITE AND HIGH-QUALITY JOBS PROGRAMS APPROPRIATION Sec. 14. 2023 Iowa Acts, chapter 110, section 15, subsection 1, paragraph a, subparagraph (1), is amended to read as follows: (1) For the purposes of providing assistance as described in section 15.335B for the high quality jobs program: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 11,700,000 (a) From the moneys appropriated in this subparagraph, the economic development authority may use not more than $1,000,000 for purposes of providing infrastructure grants to main street communities under the main street Iowa program and may allocate not more than $300,000 for the purposes of supporting statewide worker education and quality preapprenticeship programs. (b) Notwithstanding section 15.335B, subsection 2, from the moneys appropriated in this subparagraph, $300,000 is allocated to the economic development authority for certification costs associated with the authoritys certified site program. Moneys allocated in this subparagraph division must be used to certify sites in counties with a population of less than 50,000 according to the 2020 federal decennial census and to certify at least two sites in each congressional district. |
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| 27 | + | S.F. 574 b. Eighty percent of the tax credit claimed under this 1 section if all or a part of the land, buildings, or other 2 structures for which the tax credit was claimed under this 3 section cease to be eligible for the tax credit within two 4 years after the date the authority issued the tax credit to the 5 eligible business. 6 c. Sixty percent of the tax credit claimed under this 7 section if all or a part of the land, buildings, or other 8 structures for which the tax credit was claimed under this 9 section cease to be eligible for the tax credit within three 10 years after the date the authority issued the tax credit to the 11 eligible business. 12 d. Forty percent of the tax credit claimed under this 13 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 four 16 years after the date the authority issued the tax credit to the 17 eligible business. 18 e. Twenty 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 five 22 years after the date the authority issued the tax credit to the 23 eligible business. 24 Sec. 9. NEW SECTION . 15.286B Withholding tax credit. 25 1. From the remittance due to the department of revenue 26 pursuant to section 422.16, subsection 2, an eligible business 27 may withhold an amount, pursuant to section 15.285, subsection 28 1, paragraph f , of the gross wages paid to each employee in a 29 created job that pays at least the qualifying wage threshold 30 pursuant to the agreement under section 15.285. 31 2. If the amount withheld under subsection 1 is less than 32 three percent of the gross wages paid to each employee in a 33 created job that pays at least one hundred forty percent of 34 the qualifying wage threshold, the eligible business shall 35 -13- LSB 1228SV (2) 90 ko/jh 13/ 21 |
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| 29 | | - | Senate File 574, p. 15 Sec. 15. EFFECTIVE DATE. This division of this Act, being deemed of immediate importance, takes effect upon enactment. ______________________________ AMY SINCLAIR President of the Senate ______________________________ PAT GRASSLEY Speaker of the House I hereby certify that this bill originated in the Senate and is known as Senate File 574, Ninetieth General Assembly. ______________________________ W. CHARLES SMITHSON Secretary of the Senate Approved _______________, 2024 ______________________________ KIM REYNOLDS Governor |
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| 29 | + | S.F. 574 receive a credit against the remaining withholding taxes due 1 from the eligible business, or the eligible business may carry 2 the credit forward up to five consecutive tax years or until 3 depleted, whichever is earlier. 4 3. In any tax year, the aggregate amount of withholding tax 5 credit under this section and under any other program for which 6 an eligible business is receiving a withholding tax credit 7 shall not exceed the amount the eligible business is required 8 to deduct and remit to the department of revenue under section 9 422.16, subsection 2, for that tax year. 10 Sec. 10. NEW SECTION . 15.287 Foreign businesses 11 acquisition of agricultural land. 12 1. If a foreign businesss proposed project is located on a 13 mega site that includes agricultural land, the requirements of 14 section 9I.3, subsection 3, paragraph f , must be satisfied in 15 order for the foreign business to be eligible for the program. 16 2. a. A foreign business under subsection 1 that is 17 approved by the authority to participate in the program shall 18 enter into an agreement with the authority pursuant to section 19 15.285. The agreement shall include a provision that requires 20 the foreign business to comply with chapter 9I, and specifies 21 that failure to do so may result in revocation of all tax 22 incentives issued by the authority to the foreign business. 23 b. The authority may grant the foreign business one or 24 more one-year extensions in which the foreign business must 25 comply with section 9I.4. The authority shall not grant 26 more than five one-year extensions. The community in which 27 the agricultural land is located must approve each one-year 28 extension by ordinance or resolution prior to the authority 29 granting each extension. The foreign business shall comply 30 with the remaining provisions of chapter 9I to the extent the 31 provisions do not conflict with this section. 32 Sec. 11. NEW SECTION . 15.288 Other incentives. 33 1. Except for the high quality jobs program administered 34 by the authority pursuant to sections 15.326 through 15.336, 35 -14- LSB 1228SV (2) 90 ko/jh 14/ 21 |
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| 30 | + | |
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| 31 | + | S.F. 574 and the targeted jobs withholding credit pursuant to section 1 403.19A, an eligible business may apply for and be eligible to 2 receive other federal, state, and local incentives in addition 3 to the tax incentives issued by the authority to the eligible 4 business under the program. 5 2. The authority, in its discretion, may prohibit an 6 eligible business that has been issued tax incentives under 7 the program from receiving any additional tax incentive, tax 8 credit, grant, loan, or other financial assistance under any 9 program administered by the authority. 10 Sec. 12. NEW SECTION . 15.289 Property tax exemption. 11 1. A community in which an eligible businesss project 12 is located may grant the eligible business a property 13 tax exemption for a portion of the actual value added by 14 improvements to real property directly related to the eligible 15 businesss created jobs. The community may allow a property 16 tax exemption for a period not to exceed twenty years beginning 17 the year that the improvements to real property are first 18 assessed for taxation. 19 2. For purposes of this section, improvements means new 20 construction, and rehabilitation of and additions to existing 21 structures. 22 3. A property tax exemption granted under subsection 1 shall 23 apply to all taxing districts, except for school districts, in 24 which the real property is located. 25 Sec. 13. NEW SECTION . 15.290 Restrictions on board. 26 The board shall not authorize tax incentives available under 27 the program, or an exemption to restrictions on agricultural 28 land holdings pursuant to section 9I.3, subsection 3, paragraph 29 f , for more than two eligible businesses, or on or after 30 January 1, 2026, whichever occurs first. 31 EXPLANATION 32 The inclusion of this explanation does not constitute agreement with 33 the explanations substance by the members of the general assembly. 34 This bill establishes a major economic growth attraction 35 -15- LSB 1228SV (2) 90 ko/jh 15/ 21 |
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| 32 | + | |
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| 33 | + | S.F. 574 program (program) to be administered by the economic 1 development authority (authority). 2 To be eligible to receive tax incentives (incentives) under 3 the program, a businesss proposed project (project) must be 4 located on a certified site greater than 250 acres that the 5 authority has determined is suitable for the project, and the 6 businesss qualifying investment in the project must exceed $1 7 billion. Other requirements for a business to be eligible for 8 the program are detailed in the bill. Qualifying investment 9 is defined in the bill as a capital investment in real property 10 located on a certified site, including the purchase price 11 of the land, site preparation, infrastructure, and building 12 construction for use in the operation of an eligible business. 13 Qualifying investment also means a capital investment in 14 depreciable assets for use in the operation of an eligible 15 business. Certified site is defined as a site that has been 16 issued a certificate of readiness by the authority pursuant to 17 Code section 15E.18. Tax incentives and project are also 18 defined in the bill. 19 In determining if a business is eligible to participate 20 in the program, the authority shall consider a variety of 21 factors, including but not limited to whether the jobs created 22 by the businesss project are high wage, low turnover, provide 23 comprehensive benefits, and expose employees to minimal 24 occupational hazards; the impact of the project on businesses 25 that compete with the business applying to the program; and 26 the projects economic impact on the state. The bill requires 27 the authority to place greater emphasis on businesses that 28 have a high proportion of in-state suppliers and few in-state 29 competitors; and on projects that diversify the state economy 30 and have the potential to create jobs on an ongoing basis. 31 Applications for the program shall be submitted in the 32 form and manner prescribed by the authority by rule and be 33 accompanied by an application fee in an amount determined by 34 the authority by rule. In determining a businesss eligibility 35 -16- LSB 1228SV (2) 90 ko/jh 16/ 21 |
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| 34 | + | |
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| 35 | + | S.F. 574 for the program, the authority may engage outside experts 1 to complete a technical, financial, or other review of an 2 application if such review is outside the expertise of the 3 authority. The authority and the authoritys board (board) 4 may negotiate with an eligible business regarding the terms 5 of, and the aggregate value of, the incentives the eligible 6 business may receive under the program. The board may 7 authorize any combination of incentives available under the 8 program for an eligible business. The board may authorize an 9 exemption to restrictions on agricultural land holdings for a 10 foreign business that qualifies for the program pursuant to 11 the requirements detailed in the bill. Foreign business is 12 defined in the bill. 13 The bill requires an eligible business that is approved to 14 participate in the program to enter into an agreement with 15 the authority (agreement) that specifies the criteria for the 16 successful completion of all requirements of the program. 17 The agreement shall contain, at a minimum, the provisions 18 as detailed in the bill. The business shall satisfy all 19 applicable terms of the agreement by the project completion 20 date; however, the board may for good cause extend the project 21 completion date or otherwise amend the terms of the agreement. 22 The board shall not amend the terms of the agreement to allow 23 an increase in the maximum aggregate value of the incentives 24 authorized by the board. Project completion date is defined 25 in the bill. The bill permits the authority to enforce the 26 terms of the agreement as necessary and appropriate. 27 An eligible business that has been issued a certificate 28 under the program shall be entitled to a refund of the sales 29 and use taxes (refund) paid under Code chapter 423 for gas, 30 electricity, water, and sewer utility services, tangible 31 personal property, or on services rendered, furnished, or 32 performed to or for a contractor or subcontractor and used 33 in the fulfillment of a written contract relating to the 34 construction or equipping of a facility that is part of the 35 -17- LSB 1228SV (2) 90 ko/jh 17/ 21 |
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| 36 | + | |
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| 37 | + | S.F. 574 eligible businesss project. Taxes attributable to intangible 1 property and furniture and furnishings shall not be refunded. 2 The procedure for the business to receive the refund is 3 detailed in the bill. The refund shall be remitted by the 4 department of revenue (department) to the eligible business 5 equally over five tax years. Interest shall not accrue on 6 any part of the refund not yet remitted by the department to 7 the eligible business. A contractor or subcontractor that 8 willfully makes a false report of tax paid is guilty of an 9 aggravated misdemeanor, and shall be liable for payment of the 10 tax and any applicable penalty and interest. An aggravated 11 misdemeanor is punishable by confinement for no more than two 12 years and a fine of at least $855 but not more than $8,540. 13 The authority may authorize a tax credit for an eligible 14 business that is up to 5 percent of the businesss qualifying 15 investment in a certified site. The authority shall not 16 issue a tax credit certificate until the eligible businesss 17 project has been placed in service, and at least 50 percent 18 of the created jobs the eligible business agreed to in the 19 agreement, and that pay at least 140 percent of the qualifying 20 wage threshold, have been added to the eligible businesss 21 payroll. Created job and qualifying wage threshold are 22 defined in the bill. The department shall remit the tax credit 23 to the eligible business equally over five tax years. The 24 tax credit shall be allowed against taxes imposed under Code 25 chapter 422, subchapter II, III, or V, and against the moneys 26 and credits tax imposed in Code section 533.329. Any tax 27 credit in excess of the eligible businesss tax liability for 28 the tax year may be refunded or, at the eligible businesss 29 election, credited to the eligible businesss tax liability 30 in each of the following five consecutive tax years or until 31 depleted, whichever occurs first. The eligible business 32 shall make such election prior to the authority issuing a 33 tax credit certificate to the eligible business, and the 34 eligible businesss election shall be noted on the tax credit 35 -18- LSB 1228SV (2) 90 ko/jh 18/ 21 |
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| 38 | + | |
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| 39 | + | S.F. 574 certificate. A tax credit shall not be carried back to a tax 1 year prior to the tax year in which the tax credit is first 2 claimed by the eligible business. If within five years of the 3 date the authority issues an eligible business a qualifying 4 investment tax credit the eligible business sells, disposes 5 of, razes, or otherwise renders unusable all or a part of the 6 land, buildings, or other structures for which the tax credit 7 was claimed, 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 an amount as detailed 11 in the bill. 12 From the remittance due to the department pursuant to Code 13 section 422.16(2), an eligible business may withhold the 14 amount specified in the agreement, not to exceed 3 percent, of 15 the gross wages paid to each employee in a created job that 16 pays at least the qualifying wage threshold specified in the 17 agreement. The withholding may occur for the time period, 18 not to exceed the term of the agreement, specified in the 19 agreement. If the amount withheld is less than 3 percent of 20 the gross wages paid to each employee in a created job, the 21 eligible business shall receive a credit against the remaining 22 withholding taxes due from the business, or the business may 23 carry the credit forward up to five consecutive tax years or 24 until depleted, whichever is earlier. In any tax year, the 25 aggregate amount of withholding tax credit under this program, 26 and any other program for which an eligible business is 27 receiving a withholding tax credit, shall not exceed the amount 28 the eligible business is required to deduct and remit to the 29 department under Code section 422.16(2) for that tax year. 30 If a foreign businesss proposed project is located on a 31 mega site that includes agricultural land, the requirements as 32 detailed in the bill must be satisfied for the foreign business 33 to be eligible for the program. Mega site is defined in the 34 bill as a certified site greater than 1,000 acres. A foreign 35 -19- LSB 1228SV (2) 90 ko/jh 19/ 21 |
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| 40 | + | |
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| 41 | + | S.F. 574 business that is approved by the authority to participate in 1 the program shall enter into an agreement with the authority 2 that includes a provision that requires the foreign business 3 to comply with Code chapter 9I, and specifies that failure to 4 do so may result in revocation of incentives issued by the 5 authority to the foreign business. The authority may grant the 6 foreign business one or more one-year extensions in which the 7 foreign business must come into compliance with Code section 8 9I.4. The authority shall not grant a business more than five 9 one-year extensions. The community in which the agricultural 10 land is located must approve each extension by ordinance or 11 resolution prior to the authority granting each extension. 12 Except for the high quality jobs program, and the targeted 13 jobs withholding credit, an eligible business may apply 14 for and be eligible to receive other federal, state, and 15 local incentives in addition to the incentives the authority 16 issues to the business under the program. The authority, in 17 its discretion, may prohibit an eligible business that has 18 been issued incentives under the program from receiving any 19 additional tax incentive, tax credit, grant, loan, or other 20 financial assistance under any program administered by the 21 authority. 22 The bill allows a community in which an eligible businesss 23 project is located to grant the eligible business a property 24 tax exemption (exemption) for a portion of the actual value 25 added by improvements to real property directly related 26 to the eligible businesss created jobs. The community 27 may allow an exemption for a period not to exceed 20 years 28 beginning the year that the improvements are first assessed 29 for taxation. Improvements is defined as new construction, 30 and rehabilitation of and additions to existing structures. 31 An exemption granted by a community shall apply to all taxing 32 districts, except for school districts, in which the real 33 property is located. 34 The board shall not authorize incentives available under the 35 -20- LSB 1228SV (2) 90 ko/jh 20/ 21 |
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| 42 | + | |
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| 43 | + | S.F. 574 program, or an exemption to restrictions on agricultural land 1 holdings pursuant to Code section 9I.3(3)(f), for more than two 2 eligible businesses, or on or after January 1, 2026, whichever 3 occurs first. 4 -21- LSB 1228SV (2) 90 ko/jh 21/ 21 |
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