A bill for an act relating to tax credits awarded by the economic development authority for specific capital contributions made to certified rural business growth funds for investment in qualified businesses.
Impact
The expected impact of HSB274 includes enhanced economic activity in rural Iowa through the facilitation of investments in local businesses that qualify under the new program. By encouraging investments in growth funds that subsequently provide capital to these businesses, the bill aims to create and retain jobs, thereby strengthening the local economy. The economic development authority will start accepting applications for this program starting from January 7, 2026, indicating a future-focused strategy to bolster rural development initiatives.
Summary
House Study Bill 274 (HSB274) proposes the creation of the Iowa Rural Development Tax Credit Program. This program aims to provide tax credits for specific capital contributions made to certified rural business growth funds. It intends to stimulate investment in businesses with fewer than 250 employees located outside the state’s most populous areas. The economic development authority will oversee the administration and implementation of these tax credits, which are designed to attract investment to rural sectors and promote economic growth in those areas.
Contention
Contention around HSB274 primarily revolves around the effectiveness of tax credits as a tool for economic development versus direct funding methods. Opponents may argue that relying on tax incentives can lead to insufficient funding for essential services in the long term. Additionally, there are concerns regarding the oversight of how growth funds are utilized, including potential issues related to transparency and the actual measurement of job creation and economic growth resulting from these investments.
Replaced by
A bill for an act relating to tax credits awarded by the economic development authority for specific capital contributions made to certified rural business growth funds for investment in qualified businesses.
A bill for an act relating to tax credits awarded by the economic development authority for specific capital contributions made to certified rural business growth funds for investment in qualified businesses.