Senate Study Bill 1162 - Introduced SENATE/HOUSE FILE _____ BY (PROPOSED ECONOMIC DEVELOPMENT AUTHORITY BILL) 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 1228XD (12) 90 ko/jh
S.F. _____ H.F. _____ 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 1228XD (12) 90 ko/jh 1/ 19
S.F. _____ H.F. _____ (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 1228XD (12) 90 ko/jh 2/ 19
S.F. _____ H.F. _____ 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 1228XD (12) 90 ko/jh 3/ 19
S.F. _____ H.F. _____ 18. Project completion date means the date by which 1 an eligible business that has been issued a tax incentive 2 certificate by the authority under the program agrees to 3 complete the terms and conditions of the agreement under 4 section 15.285. 5 19. Project completion period means the period of 6 time between the date the authority issues a tax incentive 7 certificate to an eligible business and the project completion 8 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. Qualifying investment also means a 13 capital investment in depreciable assets. 14 21. Qualifying wage threshold means the wage level 15 represented by the wages within two standard deviations of 16 the mean wage within the laborshed area in which the eligible 17 business is located, as calculated by the authority by rule, 18 using the most current covered wage and employment data 19 available from the department of workforce development for the 20 laborshed area in which the eligible business is located. 21 22. Subcontractor means a person that contracts with 22 a contractor for the provision of property, materials, or 23 services for the construction or equipping of a facility that 24 is part of an eligible businesss project. 25 23. Tax incentives means tax credits, tax refunds, or tax 26 exemptions authorized under the program by the authority for an 27 eligible business. 28 Sec. 4. NEW SECTION . 15.283 Eligible business. 29 1. To be eligible to receive tax incentives under 30 the program, a business must meet all of the following 31 requirements: 32 a. The businesss proposed project must be located on a 33 certified site greater than two hundred fifty acres that the 34 authority has determined is suitable for the project. 35 -4- LSB 1228XD (12) 90 ko/jh 4/ 19
S.F. _____ H.F. _____ b. The businesss qualifying investment in the proposed 1 project must exceed one billion dollars. 2 c. The community in which the proposed project is located 3 must approve the project either by ordinance or resolution. 4 d. (1) The business must be primarily engaged in advanced 5 manufacturing, biosciences, or research and development. 6 The business shall not be a data center business, a retail 7 business, or a business where a cover charge or membership 8 requirement restricts certain individuals from entering the 9 business. 10 (2) Factors the authority shall consider to determine if 11 a business is primarily engaged in advanced manufacturing, 12 biosciences, or research and development shall include but are 13 not limited to all of the following: 14 (a) The businesss North American industry classification 15 system code. 16 (b) The businesss main sources of revenue. 17 (c) The businesss customer base. 18 e. (1) The business must not be solely relocating 19 operations from one area of the state to another area of 20 the state. A proposed project that does not create jobs or 21 involve a substantial amount of new capital investment shall 22 be presumed to be a relocation of operations. For purposes of 23 this subparagraph, the authority shall consider a letter from 24 the affected local communitys government officials supporting 25 the businesss move away from the affected local community 26 in making a determination whether the business is solely 27 relocating operations. 28 (2) This paragraph shall not be construed to prohibit 29 a business from expanding the businesss operations in a 30 community if the business has similar operations in this state 31 that are not closing or undergoing a substantial reduction in 32 operations. 33 f. The business must create jobs as part of the businesss 34 proposed project. The business must demonstrate that the 35 -5- LSB 1228XD (12) 90 ko/jh 5/ 19
S.F. _____ H.F. _____ created jobs will pay at least one hundred forty percent of the 1 qualifying wage threshold by the project completion date, and 2 through the maintenance period completion date. 3 g. The business must provide comprehensive benefits to 4 each employee employed in a created job. The authority may 5 adopt rules under chapter 17A to determine the requirements for 6 comprehensive benefits. 7 h. (1) The business must not have a record of violations 8 of the law or of regulations, including but not limited to 9 antitrust, environmental, trade, or worker safety, that over 10 a period of time show a consistent pattern or that establish 11 the businesss intentional, criminal, or reckless conduct in 12 violation of such laws or regulations. 13 (2) If the authority determines that the business has a 14 record of violations described in subparagraph (1), and the 15 authority finds that the violations did not seriously affect 16 public health, public safety, or the environment, the business 17 may be eligible to qualify for tax incentives under the 18 program. 19 (3) If the authority determines that the business has 20 a record of violations described in subparagraph (1), and 21 the authority finds that there were mitigating circumstances 22 related to the violations, the business may be eligible to 23 qualify for tax incentives under the program. 24 (4) In making determinations and findings under 25 subparagraphs (2) and (3), and making a determination whether a 26 business is disqualified from the program, the authority shall 27 be exempt from chapter 17A. 28 2. a. In determining if a business is eligible to 29 participate in the program, the authority shall consider a 30 variety of factors, including but not limited to all of the 31 following: 32 (1) The quality of the businesss proposed projects 33 created jobs. The authority shall place greater emphasis on 34 created jobs that are high wage, low turnover, that provide 35 -6- LSB 1228XD (12) 90 ko/jh 6/ 19
S.F. _____ H.F. _____ comprehensive benefits, and that expose employees to minimal 1 occupational hazards. A business that pays wages substantially 2 below that of similar businesses located in the same geographic 3 area shall not be given priority under the program. 4 (2) The impact of the businesss proposed project on 5 businesses that are in competition with the business. 6 The authority shall make a good-faith effort to identify 7 existing Iowa businesses in competition with the business 8 being considered for the program. The authority shall make 9 a good-faith effort to determine the probability that any 10 proposed tax incentives will displace employees of the 11 competing businesses. In determining the impact on the 12 competing businesses, created jobs resulting from employees 13 being displaced from the competing businesses shall not be 14 counted as created jobs for the applying businesss project. 15 (3) The businesss proposed projects economic impact 16 on the state. The authority shall place greater emphasis 17 on businesses and proposed projects that meet the following 18 requirements: 19 (a) The business has a high proportion of in-state 20 suppliers. 21 (b) The proposed project will diversify the state economy. 22 (c) The business has few in-state competitors. 23 (d) The proposed project has the potential to create jobs on 24 an ongoing basis. 25 (e) Any other factors the authority deems relevant in 26 determining the economic impact of a proposed project. 27 Sec. 5. NEW SECTION . 15.284 Applications authorization 28 of tax credits and exemptions. 29 1. Applications for the program shall be submitted to the 30 authority in the form and manner prescribed by the authority by 31 rule. Each application must be accompanied by an application 32 fee in an amount determined by the authority by rule. 33 2. In determining the eligibility of a business to 34 participate in the program, the authority may engage outside 35 -7- LSB 1228XD (12) 90 ko/jh 7/ 19
S.F. _____ H.F. _____ experts to complete a technical, financial, or other review 1 of an application submitted by a business if such review is 2 outside the expertise of the authority. 3 3. a. The authority and the board may negotiate with an 4 eligible business regarding the terms of, and the aggregate 5 value of, the tax incentives the eligible business may receive 6 under the program. 7 b. The board may authorize any combination of tax incentives 8 available under the program for an eligible business. 9 4. The board may authorize an exemption to restrictions on 10 agricultural land holdings pursuant to section 9I.3, subsection 11 3, paragraph f . 12 Sec. 6. NEW SECTION . 15.285 Agreement. 13 1. An eligible business that is approved by the authority to 14 participate in the program shall enter into an agreement with 15 the authority that specifies the criteria for the successful 16 completion of all requirements of the program. The agreement 17 must contain, at a minimum, provisions related to all of the 18 following: 19 a. The eligible business must certify to the authority 20 annually that the business is in compliance with the agreement. 21 b. If the eligible business fails to comply with any 22 requirements of the program or the agreement, the eligible 23 business may be required to repay any tax incentives the 24 authority issued to the eligible business. A required 25 repayment of a tax incentive shall be considered a tax payment 26 due and payable to the department of revenue by any taxpayer 27 that claimed the tax incentive, and the failure to make the 28 repayment may be treated by the department of revenue in the 29 same manner as a failure to pay the tax shown due, or required 30 to be shown due, with the filing of a return or deposit form. 31 c. If the eligible business undergoes a layoff or 32 permanently closes any of its facilities within the state, the 33 eligible business may be subject to all of the following: 34 (1) A reduction or elimination of some or all of the tax 35 -8- LSB 1228XD (12) 90 ko/jh 8/ 19
S.F. _____ H.F. _____ incentives the authority issued to the eligible business. 1 (2) Repayment of any tax incentives that the business 2 has claimed, and payment of any penalties assessed by the 3 department of revenue. 4 d. The project completion date, the maintenance period 5 completion date, the required number of created jobs, and any 6 other terms and obligations the authority deems necessary. 7 e. The eligible business shall only employ individuals 8 legally authorized to work in this state. If the eligible 9 business is found to knowingly employ individuals who are 10 not legally authorized to work in this state, in addition 11 to any penalties provided by law, all or a portion of any 12 tax incentives issued by the authority shall be subject to 13 recapture by the authority or the department of revenue. 14 f. Any terms deemed necessary by the authority to effect the 15 eligible businesss ongoing compliance with section 15.283. 16 2. The business shall satisfy all applicable terms of 17 the agreement by the project completion date; however, the 18 board may for good cause extend the project completion date or 19 otherwise amend the terms of the agreement. 20 3. The eligible business shall not assign the agreement 21 to another entity without the advance written approval of the 22 board. 23 4. The authority may enforce the terms of the agreement as 24 necessary and appropriate. 25 Sec. 7. NEW SECTION . 15.286 Sales and use tax refund. 26 1. An eligible business that has been issued a tax incentive 27 certificate under the program shall be entitled to a refund 28 of the sales and use taxes paid under chapter 423 for gas, 29 electricity, water, and sewer utility services, tangible 30 personal property, or on services rendered, furnished, or 31 performed to or for a contractor or subcontractor and used 32 in the fulfillment of the contract for the construction or 33 equipping of a facility that is part of the eligible businesss 34 project. Taxes attributable to intangible property and 35 -9- LSB 1228XD (12) 90 ko/jh 9/ 19
S.F. _____ H.F. _____ furniture and furnishings shall not be refunded. 1 2. To receive the sales and use tax refund, the eligible 2 business shall file a claim with the department of revenue as 3 follows: 4 a. The contractor or subcontractor shall state under oath, 5 on forms provided by the department of revenue, the amount of 6 the sales of tangible personal property or services rendered, 7 furnished, or performed including water, sewer, gas, and 8 electric utility services upon which sales or use tax has been 9 paid prior to contract completion, and shall submit the forms 10 to the eligible business before contract completion. 11 b. The eligible business shall inform the department of 12 revenue in writing of contract completion. The eligible 13 business shall, after contract completion, submit an 14 application to the department of revenue for a refund of the 15 amount of the sales and use taxes paid pursuant to chapter 423 16 upon any tangible personal property, or services rendered, 17 furnished, or performed, including water, sewer, gas, and 18 electric utility services. The application shall be submitted 19 in the form and manner prescribed by the department of revenue. 20 The department of revenue shall audit the application and, 21 if approved, issue a warrant to the eligible business in the 22 amount of the sales or use tax which has been paid to the 23 state of Iowa under subsection 1. The eligible businesss 24 application must be submitted to the department of revenue 25 within one year after the project completion date. An 26 application filed by the eligible business in accordance with 27 this section shall not be denied by reason of a limitation set 28 forth in chapter 421 or 423. 29 c. The refund shall be remitted by the department of revenue 30 to the eligible business equally over not fewer than three tax 31 years, and not more than five tax years, as elected by the 32 eligible business in its application under paragraph b . 33 3. A contractor or subcontractor that willfully makes a 34 false report of tax paid under this section is guilty of an 35 -10- LSB 1228XD (12) 90 ko/jh 10/ 19
S.F. _____ H.F. _____ aggravated misdemeanor, and shall be liable for payment of the 1 tax and any applicable penalty and interest. 2 Sec. 8. NEW SECTION . 15.286A Qualifying investment tax 3 credit. 4 1. The authority may authorize a tax credit for an 5 eligible business that is up to five percent of the eligible 6 businesss qualifying investment in a certified site. The 7 eligible business shall not claim the tax credit until the 8 eligible businesss project has been placed in service, 9 and at least fifty percent of the created jobs the eligible 10 business agreed to in the agreement under section 15.285 have 11 been created. The department of revenue shall remit the tax 12 credit to the eligible business equally over five tax years. 13 The tax credit shall be allowed against taxes imposed under 14 chapter 422, subchapter II, III, or V, and against the moneys 15 and credits tax imposed in section 533.329. If the eligible 16 business is a partnership, S corporation, limited liability 17 company, cooperative organized under chapter 501 and filing 18 as a partnership for federal tax purposes, or estate or trust 19 electing to have the income taxed directly to the individual, 20 an individual may claim the tax credit allowed. The amount 21 claimed by the individual shall be based upon the pro rata 22 share of the individuals earnings of the partnership, S 23 corporation, limited liability company, cooperative organized 24 under chapter 501 and filing as a partnership for federal tax 25 purposes, or estate or trust. Any tax credit in excess of 26 the eligible businesss tax liability for the tax year may be 27 refunded or, at the eligible businesss election, credited to 28 the eligible businesss tax liability in any of the following 29 five consecutive tax years or until depleted, whichever occurs 30 first. A tax credit shall not be carried back to a tax year 31 prior to the tax year in which the tax credit is first claimed 32 by the eligible business. 33 2. If within five years of the date the authority issues 34 an eligible business a tax credit under subsection 1, the 35 -11- LSB 1228XD (12) 90 ko/jh 11/ 19
S.F. _____ H.F. _____ eligible business sells, disposes of, razes, or otherwise 1 renders unusable all or a part of the land, buildings, or 2 other structures for which the tax credit was claimed under 3 this section, the tax liability of the eligible business for 4 the year in which all or part of the land, buildings, or other 5 existing structures are sold, disposed of, razed, or otherwise 6 rendered unusable shall be increased by one of the following 7 amounts: 8 a. One hundred percent of the tax credit claimed under 9 this section if all or a part of the land, buildings, or other 10 structures for which the tax credit was claimed under this 11 section cease to be eligible for the tax credit within one 12 year after the date the authority issued the tax credit to the 13 eligible business. 14 b. Eighty percent of the tax credit claimed under this 15 section if all or a part of the land, buildings, or other 16 structures for which the tax credit was claimed under this 17 section cease to be eligible for the tax credit within two 18 years after the date the authority issued the tax credit to the 19 eligible business. 20 c. Sixty percent of the tax credit claimed under this 21 section if all or a part of the land, buildings, or other 22 structures for which the tax credit was claimed under this 23 section cease to be eligible for the tax credit within three 24 years after the date the authority issued the tax credit to the 25 eligible business. 26 d. Forty percent of the tax credit claimed under this 27 section if all or a part of the land, buildings, or other 28 structures for which the tax credit was claimed under this 29 section cease to be eligible for the tax credit within four 30 years after the date the authority issued the tax credit to the 31 eligible business. 32 e. Twenty percent of the tax credit claimed under this 33 section if all or a part of the land, buildings, or other 34 structures for which the tax credit was claimed under this 35 -12- LSB 1228XD (12) 90 ko/jh 12/ 19
S.F. _____ H.F. _____ section cease to be eligible for the tax credit within five 1 years after the date the authority issued the tax credit to the 2 eligible business. 3 Sec. 9. NEW SECTION . 15.286B Withholding tax credit. 4 1. From the remittance due to the department of revenue 5 pursuant to section 422.16, subsection 2, an eligible business 6 may withhold an amount not to exceed three percent of the gross 7 wages paid to each employee in a created job that pays at least 8 the qualifying wage threshold pursuant to the agreement under 9 section 15.285. 10 2. If the amount withheld under subsection 1 is less than 11 three percent of the gross wages paid to each employee in a 12 created job, the eligible business shall receive a credit 13 against the remaining withholding taxes due from the eligible 14 business, or the eligible business may carry the credit forward 15 up to five consecutive tax years or until depleted, whichever 16 is earlier. 17 3. In any tax year, the aggregate amount of withholding tax 18 credit under this section and under any other program for which 19 an eligible business is receiving a withholding tax credit 20 shall not exceed the amount the eligible business is required 21 to deduct and remit to the department of revenue under section 22 422.16, subsection 2, for that tax year. 23 Sec. 10. NEW SECTION . 15.287 Foreign businesses 24 acquisition of agricultural land. 25 1. If a foreign businesss proposed project is located on a 26 mega site that includes agricultural land, the requirements of 27 section 9I.3, subsection 3, paragraph f , must be satisfied in 28 order for the foreign business to be eligible for the program. 29 2. a. A foreign business under subsection 1 that is 30 approved by the authority to participate in the program shall 31 enter into an agreement with the authority pursuant to section 32 15.285. The agreement shall include a provision that requires 33 the foreign business to comply with chapter 9I, and specifies 34 that failure to do so may result in revocation of all tax 35 -13- LSB 1228XD (12) 90 ko/jh 13/ 19
S.F. _____ H.F. _____ incentives issued by the authority to the foreign business. 1 b. The authority may grant the foreign business one or 2 more one-year extensions in which the foreign business must 3 comply with section 9I.4. The authority shall not grant 4 more than five one-year extensions. The community in which 5 the agricultural land is located must approve each one-year 6 extension by ordinance or resolution prior to the authority 7 granting each extension. The foreign business shall comply 8 with the remaining provisions of chapter 9I to the extent the 9 provisions do not conflict with this section. 10 Sec. 11. NEW SECTION . 15.288 Other incentives. 11 1. Except for the high quality jobs program administered 12 by the authority pursuant to sections 15.326 through 15.336, 13 and the targeted jobs withholding credit pursuant to section 14 403.19A, an eligible business may apply for and be eligible to 15 receive other federal, state, and local incentives in addition 16 to the tax incentives issued by the authority to the eligible 17 business under the program. 18 2. The authority, in its discretion, may prohibit an 19 eligible business that has been issued tax incentives under 20 the program from receiving any additional tax incentive, tax 21 credit, grant, loan, or other financial assistance under any 22 program administered by the authority. 23 Sec. 12. NEW SECTION . 15.289 Property tax exemption. 24 1. A community in which an eligible businesss project 25 is located may grant the eligible business a property tax 26 exemption for all of, or a portion of, the actual value added 27 by improvements to real property directly related to the 28 eligible businesss created jobs. The community may allow a 29 property tax exemption for a period not to exceed twenty years 30 beginning the year that the improvements to real property are 31 first assessed for taxation. 32 2. For purposes of this section, improvements means new 33 construction, and rehabilitation of and additions to existing 34 structures. 35 -14- LSB 1228XD (12) 90 ko/jh 14/ 19
S.F. _____ H.F. _____ 3. A property tax exemption granted under subsection 1 shall 1 apply to all taxing districts, except for school districts, in 2 which the real property is located. 3 EXPLANATION 4 The inclusion of this explanation does not constitute agreement with 5 the explanations substance by the members of the general assembly. 6 This bill establishes a major economic growth attraction 7 program (program) to be administered by the economic 8 development authority (authority). 9 To be eligible to receive tax incentives (incentives) under 10 the program, a businesss proposed project (project) must 11 be located on a certified site greater than 250 acres that 12 the authority has determined is suitable for the project, 13 and the businesss qualifying investment in the project must 14 exceed $1 billion. Other requirements for a business to be 15 eligible for the program are detailed in the bill. Qualifying 16 investment is defined in the bill as a capital investment 17 in real property located on a certified site, including the 18 purchase price of the land, site preparation, infrastructure, 19 and building construction. Qualifying investment also means 20 a capital investment in depreciable assets. Certified site 21 is defined as a site that has been issued a certificate of 22 readiness by the authority pursuant to Code section 15E.18. 23 Tax incentives and project are also defined in the bill. 24 In determining if a business is eligible to participate 25 in the program, the authority shall consider a variety of 26 factors, including but not limited to whether the jobs created 27 by the businesss project are high wage, low turnover, provide 28 comprehensive benefits, and expose employees to minimal 29 occupational hazards; the impact of the project on businesses 30 that compete with the business applying to the program; and 31 the projects economic impact on the state. The bill requires 32 the authority to place greater emphasis on businesses that 33 have a high proportion of in-state suppliers and few in-state 34 competitors; and on projects that diversify the state economy 35 -15- LSB 1228XD (12) 90 ko/jh 15/ 19
S.F. _____ H.F. _____ and have the potential to create jobs on an ongoing basis. 1 Applications for the program shall be submitted in the 2 form and manner prescribed by the authority by rule and be 3 accompanied by an application fee in an amount determined by 4 the authority by rule. In determining a businesss eligibility 5 for the program, the authority may engage outside experts 6 to complete a technical, financial, or other review of an 7 application if such review is outside the expertise of the 8 authority. The authority and the authoritys board (board) 9 may negotiate with an eligible business regarding the terms 10 of, and the aggregate value of, the incentives the eligible 11 business may receive under the program. The board may 12 authorize any combination of incentives available under the 13 program for an eligible business. The board may authorize an 14 exemption to restrictions on agricultural land holdings for a 15 foreign business that qualifies for the program pursuant to 16 the requirements detailed in the bill. Foreign business is 17 defined in the bill. 18 The bill requires an eligible business that is approved to 19 participate in the program to enter into an agreement with 20 the authority that specifies the criteria for the successful 21 completion of all requirements of the program. The agreement 22 shall contain, at a minimum, the provisions as detailed in 23 the bill. The business shall satisfy all applicable terms 24 of the agreement by the project completion date; however, 25 the board may for good cause extend the project completion 26 date or otherwise amend the terms of the agreement. Project 27 completion date is defined in the bill. The bill permits the 28 authority to enforce the terms of the agreement as necessary 29 and appropriate. 30 An eligible business that has been issued a certificate 31 under the program shall be entitled to a refund of the sales 32 and use taxes (refund) paid under Code chapter 423 for gas, 33 electricity, water, and sewer utility services, tangible 34 personal property, or on services rendered, furnished, or 35 -16- LSB 1228XD (12) 90 ko/jh 16/ 19
S.F. _____ H.F. _____ performed to or for a contractor or subcontractor and used in 1 the fulfillment of the contract relating to 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. The procedure 5 for the business to receive the refund is detailed in the bill. 6 The refund shall be remitted by the department to the eligible 7 business equally over not fewer than three tax years, and not 8 more than five tax years, as elected by the business in its 9 application to the department. A contractor or subcontractor 10 that willfully makes a false report of tax paid is guilty of 11 an aggravated misdemeanor, and shall be liable for payment of 12 the tax and any applicable penalty and interest. An aggravated 13 misdemeanor is punishable by confinement for no more than two 14 years and a fine of at least $855 but not more than $8,540. 15 The authority may authorize a tax credit for an eligible 16 business that is up to 5 percent of the businesss qualifying 17 investment in a certified site. The eligible business shall 18 not claim the tax credit until the eligible businesss project 19 has been placed in service, and at least 50 percent of the 20 created jobs the eligible business agreed to in the agreement 21 the business entered into with the authority have been created. 22 The department shall remit the tax credit to the eligible 23 business equally over five tax years. The tax credit shall 24 be allowed against taxes imposed under Code chapter 422, 25 subchapter II, III, or V, and against the moneys and credits 26 tax imposed in Code section 533.329. Any tax credit in excess 27 of the eligible businesss tax liability for the tax year 28 may be refunded or, at the eligible businesss election, 29 credited to the eligible businesss tax liability in each of 30 the following five consecutive tax years or until depleted, 31 whichever occurs first. A tax credit shall not be carried back 32 to a tax year prior to the tax year in which the tax credit 33 is first claimed by the eligible business. If within five 34 years of the date the authority issues an eligible business a 35 -17- LSB 1228XD (12) 90 ko/jh 17/ 19
S.F. _____ H.F. _____ qualifying investment tax credit the eligible business sells, 1 disposes of, razes, or otherwise renders unusable all or a part 2 of the land, buildings, or other structures for which the tax 3 credit was claimed, the tax liability of the eligible business 4 for the year in which all or part of the land, buildings, or 5 other existing structures are sold, disposed of, razed, or 6 otherwise rendered unusable shall be increased by an amount as 7 detailed in the bill. 8 From the remittance due to the department of revenue 9 pursuant to Code section 422.16(2), an eligible business may 10 withhold an amount not to exceed 3 percent of the gross wages 11 paid to each employee in a created job that pays at least 12 the qualifying wage threshold specified in the agreement the 13 business entered into with the authority. Created job and 14 qualifying wage threshold are defined in the bill. If the 15 amount withheld is less than 3 percent of the gross wages 16 paid to each employee in a created job, the eligible business 17 shall receive a credit against the remaining withholding 18 taxes due from the business, or the business may carry the 19 credit forward up to five consecutive tax years or until 20 depleted, whichever is earlier. In any tax year, the aggregate 21 amount of withholding tax credit under this program, and any 22 other program for which an eligible business is receiving 23 a withholding tax credit, shall not exceed the amount the 24 eligible business is required to deduct and remit to the 25 department of revenue under Code section 422.16(2) for that tax 26 year. 27 If a foreign businesss proposed project is located on a 28 mega site that includes agricultural land, the requirements as 29 detailed in the bill must be satisfied for the foreign business 30 to be eligible for the program. Mega site is defined in the 31 bill as a certified site greater than 1,000 acres. A foreign 32 business that is approved by the authority to participate in 33 the program shall enter into an agreement with the authority 34 that includes a provision that requires the foreign business 35 -18- LSB 1228XD (12) 90 ko/jh 18/ 19
S.F. _____ H.F. _____ to comply with Code chapter 9I, and specifies that failure to 1 do so may result in revocation of incentives issued by the 2 authority to the foreign business. The authority may grant the 3 foreign business one or more one-year extensions in which the 4 foreign business must come into compliance with Code section 5 9I.4. The authority shall not grant a business more than five 6 one-year extensions. The community in which the agricultural 7 land is located must approve each extension by ordinance or 8 resolution prior to the authority granting each extension. 9 Except for the high quality jobs program, and the targeted 10 jobs withholding credit, an eligible business may apply 11 for and be eligible to receive other federal, state, and 12 local incentives in addition to the incentives the authority 13 issues to the business under the program. The authority, in 14 its discretion, may prohibit an eligible business that has 15 been issued incentives under the program from receiving any 16 additional tax incentive, tax credit, grant, loan, or other 17 financial assistance under any program administered by the 18 authority. 19 The bill allows a community in which an eligible businesss 20 project is located to grant the eligible business a property 21 tax exemption (exemption) for all of, or a portion of, the 22 actual value added by improvements to real property directly 23 related to the eligible businesss created jobs. The community 24 may allow an exemption for a period not to exceed 20 years 25 beginning the year that the improvements are first assessed 26 for taxation. Improvements is defined as new construction, 27 and rehabilitation of and additions to existing structures. 28 An exemption granted by a community shall apply to all taxing 29 districts, except for school districts, in which the real 30 property is located. 31 -19- LSB 1228XD (12) 90 ko/jh 19/ 19