SF 2179 (LSB 5483SV (1) 86)

SENATE FILE 2179

BY  COMMITTEE ON ECONOMIC GROWTH

(SUCCESSOR TO SSB 3095)

A BILL FOR

An Act related to the high quality jobs program by allowing additional tax incentives for businesses that use contractors and subcontractors operating or participating in an apprenticeship program and including applicability provisions.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

    Section 1.  Section 15.335A, subsection 1, unnumbered paragraph 1, Code 2016, is amended to read as follows:
   Tax incentives are available to eligible businesses as provided in this section. The incentives under this subsection are based upon the number of jobs created or retained that pay at least one hundred twenty percent of the qualifying wage threshold and the amount of the qualifying investment made according to the following schedule:
    Sec. 2.  Section 15.335A, Code 2016, is amended by adding the following new subsection:
   NEW SUBSECTION.  1A.  a.  In addition to the tax incentives available under subsection 1, an additional investment tax credit of up to two percent, as provided in this subsection, is available to an eligible business if the eligible business contracts with contractors or subcontractors who operate or participate in any apprenticeship program for the construction or equipping of a facility of the business.
   b.  The amount of the additional investment tax credit shall be calculated as follows:
   (1)  For an eligible business that directs seventy percent of the amount of the qualifying investment to contractors and subcontractors described in paragraph “a”, an additional credit of up to one and four-tenths percent.
   (2)  For each percentage point that the amount of the qualifying investment directed to contractors and subcontractors described in paragraph “a” exceeds seventy percent, the additional investment tax credit rate under subparagraph (1) shall be increased by up to two one-hundredths of one percent, such that an eligible business that directs one hundred percent of the amount of the qualifying investment to contractors and subcontractors described in paragraph “a” may receive an additional credit of up to two percent.
    Sec. 3.  Section 15.335A, subsection 2, Code 2016, is amended by adding the following new paragraph:
   NEW PARAGRAPH.  0b.  “Apprenticeship program” means the same as defined in section 15B.2.
    Sec. 4.  APPLICABILITY.  This Act applies to businesses that receive an award of tax incentives under section 15.335A on or after July 1, 2016.
EXPLANATION
The inclusion of this explanation does not constitute agreement with

the explanation’s substance by the members of the general assembly.
   This bill permits the economic development authority (authority) to provide additional tax incentives to businesses using apprenticeship training program contractors and subcontractors for projects in which qualifying investments are made under the high quality jobs program.
   Under the bill, the authority is permitted to provide an additional investment tax credit to a business if the business contracts with a contractor or subcontractor who operates or participates in an apprenticeship program for the construction or equipping of a facility of the business. 
   Under the bill, if an eligible business directs 70 percent of the qualifying investment to qualifying contractors or subcontractors, the business is eligible to receive an additional investment tax credit of up to 1.40 percent. If an eligible business directs more than 70 percent of the qualifying investment to qualifying contractors or subcontractors, the additional investment tax credit available shall increase 0.02 percent above the 1.40 percent base for each one percentage point increase to the percent of the qualifying investment directed to qualifying contractors or subcontractors. Under the bill, therefore, an eligible business that directs 100 percent of the qualifying investment to qualifying contractors or subcontractors is eligible to receive an additional investment tax credit of up to 2 percent.
   The bill applies to businesses that receive an award of tax incentives under the high quality jobs program on or after July 1, 2016.