House File 2418 - Introduced HOUSE FILE 2418 BY LYKAM , THEDE , WOOD , and WINCKLER A BILL FOR An Act relating to the targeted jobs withholding tax credit 1 program by modifying the number and qualification of cities 2 that may participate in the program. 3 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 4 TLSB 5771YH (3) 85 mm/sc

H.F. 2418 Section 1. Section 403.19A, subsection 2, Code 2014, is 1 amended to read as follows: 2 2. a. An eligible city may apply for designation as a pilot 3 project city pursuant to this subsection . An eligible city is 4 a city that wholly contains three or more census tracts and is 5 located in a county meeting one of the following requirements: 6 (1) A county that borders Nebraska. 7 (2) A county that borders South Dakota. 8 (3) A county that borders a state other than Nebraska or 9 South Dakota. 10 (4) A county that borders Illinois. 11 b. (1) The department of economic development shall 12 approve four five eligible cities as pilot project cities, one 13 pursuant to paragraph “a” , subparagraph (1), one pursuant to 14 paragraph “a” , subparagraph (2), and two pursuant to paragraph 15 “a” , subparagraph (3) , and one pursuant to paragraph “a” , 16 subparagraph (4) . The city approved pursuant to paragraph 17 “a” , subparagraph (4), shall have a population of at least 18 eighty-five thousand six hundred residents but not more than 19 one hundred ten thousand residents, which city shall be located 20 in a county with a population of at least one hundred twenty 21 thousand residents but not more than one hundred seventy 22 thousand residents, as determined by the 2010 certified federal 23 census. If two eligible cities are approved which are located 24 in the same county and the county has a population of less than 25 forty-five thousand, the two approved eligible cities shall be 26 considered one pilot project city. If more than two cities 27 meeting the requirements of paragraph “a” , subparagraph (3), 28 apply to be designated as a pilot project city, the department 29 of economic development shall determine which two cities hold 30 the most potential to create new jobs or generate the greatest 31 capital within their areas. Applications from eligible 32 cities seeking approval under paragraph “a” , subparagraph (1), 33 (2), or (3), filed on or after October 1, 2006, shall not be 34 considered. Applications from eligible cities seeking approval 35 -1- LSB 5771YH (3) 85 mm/sc 1/ 3

H.F. 2418 under paragraph “a” , subparagraph (4), filed on or after January 1 1, 2015, shall not be considered. 2 (2) If a pilot project city does not enter into a 3 withholding agreement within one year of its approval as a 4 pilot project city, the city shall lose its status as a pilot 5 project city. If two pilot project cities are located in the 6 same county, the loss of status by one pilot project city shall 7 not cause the second pilot project city in the county to lose 8 its status as a pilot project city. Upon such occurrence, the 9 department of economic development shall take applications from 10 other eligible cities to replace that city. Another city shall 11 be designated within six months. 12 (3) On July 1, 2011, the economic development authority 13 shall assume responsibility for the administration of this 14 subsection . 15 EXPLANATION 16 The inclusion of this explanation does not constitute agreement with 17 the explanation’s substance by the members of the general assembly. 18 This bill relates to the targeted jobs withholding tax 19 credit pilot project, which is a program that allows pilot 20 project cities to enter into withholding agreements with 21 businesses that meet certain job creation, capital investment, 22 and private financial support requirements within the city. 23 Withholding agreements provide for the diversion of a certain 24 percentage of the gross wages paid by the business to the pilot 25 project city for a project related to the employer pursuant to 26 the agreement. 27 Under current law, the program is restricted to four pilot 28 project cities; one in a county bordering Nebraska, one in a 29 county bordering South Dakota, and two in counties bordering 30 states other than Nebraska or South Dakota. However, a county 31 with a population of less than 45,000 residents may count 32 two cities as one pilot project city. The current pilot 33 project cities are Sioux City, Fort Madison, Council Bluffs, 34 Burlington, and Keokuk. 35 -2- LSB 5771YH (3) 85 mm/sc 2/ 3

H.F. 2418 The bill amends the requirement that eligible cities contain 1 three or more census tracts to specify that eligible cities 2 wholly contain three or more census tracts. 3 The bill allows an additional eligible city from a county 4 that borders Illinois to be designated as a pilot project 5 city. In order to qualify, the city must have a population 6 of 86,500 to 110,000 residents, and must be located in a 7 county with a population of 120,000 to 170,000 residents, as 8 determined by the 2010 certified federal census. The bill 9 allows applications from eligible cities for designation as 10 this pilot project city to be filed before January 1, 2015. 11 -3- LSB 5771YH (3) 85 mm/sc 3/ 3