HF 2065 (LSB 5580YH (10) 88)

HOUSE FILE 2065

BY  BRINK, KERR, MAXWELL, THORUP, WILLS, BACON, MITCHELL, PAUSTIAN, BAXTER, SEXTON, KAUFMANN, HUSEMAN, DOLECHECK, SORENSEN, THOMPSON, JENEARY, GERHOLD, OSMUNDSON, HITE, KLEIN, GUSTAFSON, SHIPLEY, BEST, CARLSON, MOORE, BLOOMINGDALE, and A. MEYER

A BILL FOR

An Act relating to certain tax credits and assistance awarded by the economic development authority under the high quality jobs program to eligible businesses, including those in rural communities, and including effective date provisions.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

    Section 1.  Section 15.327, Code 2020, is amended by adding the following new subsection:
   NEW SUBSECTION.  27.  “Rural community” means any city located in this state with a population of thirty thousand or less in a county with a population of fifty thousand or less. A rural community located in more than one county shall be considered to be located in the county having the greatest taxable base within the city.
    Sec. 2.  Section 15.335A, subsection 1, unnumbered paragraph 1, Code 2020, is amended to read as follows:
   Tax incentives are available to eligible businesses as provided in this section subsection and subsection 1A. The incentives 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. 3.  Section 15.335A, Code 2020, is amended by adding the following new subsection:
   NEW SUBSECTION.  1A.  Tax incentives are available to eligible businesses located in rural communities as provided in this subsection. The incentives are based upon the number of jobs created or retained that pay at least one hundred ten percent of the qualifying wage threshold and the amount of the qualifying investment made according to the following schedule:
   a.  The number of jobs is zero and economic activity is furthered by the qualifying investment and the amount of the qualifying investment is one of the following:
   (1)  Less than fifty thousand dollars, then the tax incentive is the investment tax credit of up to two percent.
   (2)  At least fifty thousand dollars but less than two hundred fifty thousand dollars, then the tax incentives are the investment tax credit of up to two percent and the sales tax refund.
   (3)  At least two hundred fifty thousand dollars, then the tax incentives are the investment tax credit of up to two percent, the sales tax refund, and the additional research and development tax credit.
   b.  The number of jobs is one but not more than five and the amount of the qualifying investment is one of the following:
   (1)  Less than fifty thousand dollars, then the tax incentive is the investment tax credit of up to three percent.
   (2)  At least fifty thousand dollars but less than two hundred fifty thousand dollars, then the tax incentives are the investment tax credit of up to three percent and the sales tax refund.
   (3)  At least two hundred fifty thousand dollars, then the tax incentives are the investment tax credit of up to three percent, the sales tax refund, and the additional research and development tax credit.
   c.  The number of jobs is six but not more than ten and the amount of the qualifying investment is one of the following:
   (1)  Less than fifty thousand dollars, then the tax incentive is the investment tax credit of up to four percent.
   (2)  At least fifty thousand dollars but less than two hundred fifty thousand dollars, then the tax incentives are the investment tax credit of up to four percent and the sales tax refund.
   (3)  At least two hundred fifty thousand dollars, then the tax incentives are the investment tax credit of up to four percent, the sales tax refund, and the additional research and development tax credit.
   d.  The number of jobs is eleven but not more than fifteen and the amount of the qualifying investment is one of the following:
   (1)  Less than fifty thousand dollars, then the tax incentive is the investment tax credit of up to five percent.
   (2)  At least fifty thousand dollars but less than two hundred fifty thousand dollars, then the tax incentives are the investment tax credit of up to five percent and the sales tax refund.
   (3)  At least two hundred fifty thousand dollars, then the tax incentives are the investment tax credit of up to five percent, the sales tax refund, and the additional research and development tax credit.
   e.  The number of jobs is sixteen or more and the amount of the qualifying investment is one of the following:
   (1)  Less than fifty thousand dollars, then the tax incentive is the investment tax credit of up to six percent.
   (2)  At least fifty thousand dollars but less than two hundred fifty thousand dollars, then the tax incentives are the investment tax credit of up to six percent and the sales tax refund.
   (3)  At least two hundred fifty thousand dollars, then the tax incentives are the investment tax credit of up to six percent, the sales tax refund, and the additional research and development tax credit.
   f.  The number of jobs is thirty-one but not more than forty and the amount of the qualifying investment is at least five million dollars, then the tax incentives are the local property tax exemption, the investment tax credit of up to seven percent, the sales tax refund, and the additional research and development tax credit.
   g.  The number of jobs is forty-one but not more than sixty and the amount of the qualifying investment is at least five million dollars, then the tax incentives are the local property tax exemption, the investment tax credit of up to eight percent, the sales tax refund, and the additional research and development tax credit.
   h.  The number of jobs is sixty-one but not more than eighty and the amount of the qualifying investment is at least five million dollars, then the tax incentives are the local property tax exemption, the investment tax credit of up to nine percent, the sales tax refund, and the additional research and development tax credit.
   i.  The number of jobs is eighty-one but not more than one hundred and the amount of the qualifying investment is at least five million dollars, then the tax incentives are the local property tax exemption, the investment tax credit of up to ten percent, the sales tax refund, and the additional research and development tax credit.
   j.  The number of jobs is at least one hundred one and the amount of the qualifying investment is at least ten million dollars, then the tax incentives are the local property tax exemption, the investment tax credit of up to eleven percent, the sales tax refund, and the additional research and development tax credit.
    Sec. 4.  Section 15.335B, subsection 3, paragraph c, Code 2020, is amended to read as follows:
   c.  (1)  Consider the amount and type of the local community match. The as follows: 
   (a)  In a community with a population of less than five thousand a community match shall not be required.
   (b)  In a community with a population equal to or greater than five thousand, but less than fifteen thousand, a community match of at least five percent of the projected funds to be expended by the eligible business shall be required.
   (c)  In a community with a population equal to or greater than fifteen thousand, but less than thirty thousand, a community match of at least ten percent of the projected funds to be expended by the eligible business shall be required.
   (d)  In a community with a population equal to or greater than thirty thousand a community match of at least twenty percent of the projected funds to be expended by the eligible business shall be required.
   (2)  Notwithstanding subparagraph (1), the authority may provide assistance to an early-stage business in a high-growth industry regardless of the amount of local match involved.
    Sec. 5.  NEW SECTION.  15.337A  Rules.
   The authority shall adopt rules pursuant to chapter 17A to administer this part.
    Sec. 6.  EFFECTIVE DATE.  This Act, being deemed of immediate importance, takes effect upon enactment.
EXPLANATION
The inclusion of this explanation does not constitute agreement with
the explanation’s substance by the members of the general assembly.
   This bill relates to certain tax credits and assistance awarded under the high quality jobs program by the economic development authority to eligible businesses, including those in rural communities.
   The bill provides for tax incentives for eligible businesses in rural communities. “Rural community” is defined in the bill as a city located in this state with a population of 30,000 or less in a county with a population of 50,000 or less. If the rural community is located in more than one county, the rural community is considered to be located in the county that has the greatest taxable base within the city. The tax incentives are based upon the number of jobs created or retained that pay at least 110 percent of the qualifying wage threshold and the amount of the qualifying investment. The tax incentives are based upon a schedule as detailed in the bill.
   The bill also details the requirements for a community match, based on the size of the community, in order for an eligible business to be awarded assistance by the authority from the fund created in Code section 15.335B.
   The bill directs the authority to adopt rules to administer the high quality jobs program.
   The bill takes effect upon enactment.