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PAG LIN 1 1 Section 1. Section 15.343, subsection 1, paragraph c, 1 2 unnumbered paragraph 1, Code Supplement 1995, is amended to 1 3 read as follows: 1 4 Repayment moneys pursuant to section 422.16A, up to a1 5maximum of two million dollars each year. 1 6 Sec. 2. Section 15.343, subsection 1, Code Supplement 1 7 1995, is amended by adding the following new paragraph: 1 8 NEW PARAGRAPH. d. The innovative skill development 1 9 account created in section 15.349. 1 10 Sec. 3. NEW SECTION. 15.349 INNOVATIVE SKILL DEVELOPMENT 1 11 ACCOUNT. 1 12 An innovative skill development account is created within 1 13 the workforce development fund to be used by the department to 1 14 support innovative skill development training for Iowa 1 15 businesses. Training to be funded shall include but is not 1 16 limited to business network training programs, innovative 1 17 apprenticeship programs, and critical skill training for 1 18 industries experiencing labor shortages. The department shall 1 19 adopt rules governing the operation of and eligibility for 1 20 participation beginning July 1, 1996, in the account. 1 21 Sec. 4. Section 15E.112, subsection 1, Code 1995, is 1 22 amended to read as follows: 1 23 1. A value-added agricultural products and processes 1 24 financial assistance fund is created within the state treasury 1 25 under the control of the department. The fund shall consist 1 26 of any money appropriated by the general assembly and any 1 27 other moneys available to and obtained or accepted by the 1 28 department from the federal government or private sources for 1 29 placement in the fund. Until July 1, 2000, moneys shall be 1 30 deposited in the fund as provided in section 423.24. Not more 1 31 thanonefour percent of the total moneys available to support 1 32 value-added agricultural products and processes pursuant to 1 33 section 423.24 during each quarter shall be used by the 1 34 department for administration of the value-added agricultural 1 35 products and processes financial assistance program, as 2 1 provided in section 15E.111. The assets of the fund shall be 2 2 used by the department only for carrying out the purposes of 2 3 section 15E.111. 2 4 Sec. 5. NEW SECTION. 15E.113 MICROBUSINESS RURAL 2 5 ENTERPRISE ASSISTANCE. 2 6 1. As used in this section: 2 7 a. "Department" means the department of economic 2 8 development. 2 9 b. "Microbusiness" or "microbusiness enterprise" means a 2 10 business producing services with five or fewer full-time 2 11 equivalent employee positions and with assistance requirements 2 12 of not more than twenty-five thousand dollars. 2 13 c. "Microbusiness organization" means a nonprofit 2 14 corporation organized under chapter 504A which is exempt from 2 15 taxation pursuant to section 501(c) of the Internal Revenue 2 16 Code and which has a principal mission of actively engaging in 2 17 microbusiness development, training, technical assistance, and 2 18 capital access for the start-up or expansion of 2 19 microbusinesses. 2 20 2. The department may allocate from the value-added 2 21 agricultural products and processes financial assistance fund 2 22 an amount equal to one and one-quarter percent of the total 2 23 moneys used to support value-added agricultural products and 2 24 processes as provided in section 423.24 during each quarter to 2 25 be used for the purpose of conducting a microbusiness rural 2 26 enterprise assistance program. 2 27 3. The department may contract with a microenterprise 2 28 organization actively engaged in microbusiness enterprise to 2 29 assist in the establishment of this program. In order to 2 30 qualify for the contract, the microenterprise organization 2 31 shall do all of the following: 2 32 a. Demonstrate a past performance of and a capacity to 2 33 successfully engage in microbusiness development. 2 34 b. Have a statewide commitment to and focus on 2 35 microbusiness development. 3 1 c. Provide training and technical assistance. 3 2 d. Demonstrate an ability to provide access to capital for 3 3 start-up or expansion of a microbusiness. 3 4 e. Have established linkages with financial institutions. 3 5 f. Demonstrate an ability to provide follow-up technical 3 6 assistance after a microbusiness start-up or expansion. 3 7 4. Moneys allocated pursuant to this section which remain 3 8 unexpended or unobligated at the end of a fiscal year shall 3 9 remain available to the department to support the assistance 3 10 program or may be credited to the value-added agricultural 3 11 products and processes financial assistance fund created in 3 12 section 15E.112 and shall not revert notwithstanding section 3 13 8.33. 3 14 5. The department shall submit a report in accordance with 3 15 section 7A.11 not later than November 1 of each year detailing 3 16 the activities of the microenterprise organization and 3 17 describing the success of the project. 3 18 Sec. 6. NEW SECTION. 15E.175 SUPPLEMENTAL NEW JOBS 3 19 CREDIT FROM WITHHOLDING. 3 20 In order to promote the creation of additional high quality 3 21 new jobs within the state, an agreement under section 260E.3 3 22 may include a provision for a supplemental new jobs credit 3 23 from withholding from jobs created under the agreement. A 3 24 provision in an agreement for which a supplemental credit from 3 25 withholding is included shall provide for the following: 3 26 1. That the project shall be administered in the same 3 27 manner as a project under chapter 260E and that a supplemental 3 28 new jobs credit from withholding in an amount equal to one and 3 29 one-half percent of the gross wages paid by the employer 3 30 pursuant to section 422.16 is authorized to fund the program 3 31 services for the additional project. 3 32 2. That the supplemental new jobs credit from withholding 3 33 shall be collected, accounted for, and may be pledged by the 3 34 community college in the same manner as described in section 3 35 260E.5. 4 1 3. To provide funds for the payment of the costs of the 4 2 additional project, a community college may borrow money, 4 3 issue and sell certificates, and secure the payment of the 4 4 certificates in the same manner as described in section 4 5 260E.6, including, but not limited to, providing the 4 6 assessment of an annual levy as described in section 260E.6, 4 7 subsection 4. The program and credit authorized by this 4 8 subsection is in addition to, and not in lieu of, the program 4 9 and credit authorized in chapter 260E. 4 10 Sec. 7. Section 260F.1, Code 1995, is amended to read as 4 11 follows: 4 12 260F.1 TITLE. 4 13 This chapter shall be known and may be cited as the "Iowa 4 14small business newjobs training Act". 4 15 Sec. 8. Section 260F.2, Code 1995, is amended to read as 4 16 follows: 4 17 260F.2 DEFINITIONS. 4 18 When used in this chapter, unless the context otherwise 4 19 requires: 4 20 1. "Agreement" is the agreement between a business and a 4 21 community college concerning a project. 4 222. "Board of directors" means the board of directors of a4 23community college.4 243.2. "Community college" means a community college 4 25 established under chapter 260C. 4 264.3. "Date of commencement of the project" means the date 4 27 of the preliminary agreement or the date an application for 4 28 assistance is received by the department. 4 29 4. "Department" means the department of economic 4 30 development. 4 31 5. "Eligible business" or "business" means a business 4 32 training employees which is engaged in interstate or 4 33 intrastate commerce for the purpose of manufacturing, 4 34 processing, or assembling products, conducting research and 4 35 development, or providing services in interstate commerce, but 5 1 excludes retail, health, or professional services and which 5 2 meets the other criteria established by theIowadepartmentof5 3economic development."Eligible business" does not include a5 4business which closes or substantially reduces its operation5 5in one area of the state of Iowa and relocates substantially5 6the same operation in another area of the state of Iowa. This5 7subsection does not prohibit a business from expanding its5 8operations in another area of the state provided that existing5 9operations of a similar nature are not closed or substantially5 10reduced. "Small"Eligible business" does not include a 5 11 business whose training costs can be economically funded under 5 12 chapter 260E, a business which closes or reduces its 5 13 employment base by twenty-five percent or more in order to 5 14 relocate substantially the same operation to another area, or 5 15 a business which is involved in a strike, lockout, or other 5 16 labor dispute. 5 17"Eligible business" includes the following:5 18a. Retraining business which is currently conducting5 19retooling of a production facility.5 20b. Small business which meets other criteria established5 21by the department of economic development relating to business5 22size.5 23 6. "Employee" meansthe person employed in a new job by a5 24small business ora person currently employed by a business 5 25 who is to beretrainedtrained. However, "employee" does not 5 26 include replacement workers who are hired as a result of a 5 27 strike, lockout, or other labor dispute. 5 287. "Incremental property taxes" means the taxes as5 29provided in section 260F.4.5 308.7. "Jobs training program" or "program" means the 5 31 project or projects established by a community college for the 5 32creation of jobs by providing education and training of5 33workers for new jobs for a new or expanding small business or5 34for the retraining of workers of an existing businesstraining 5 35 of employees. 6 19. "New job" means a job in a new or expanding small6 2business but does not include jobs of recalled workers, or6 3replacement jobs or other jobs that formerly existed in the6 4small business in the state of Iowa.6 510. "New jobs credit from withholding" means the credit as6 6provided in section 260F.5.6 711.8. "Participating business" meansthe small business6 8providing new jobs or retraining jobs anda business training 6 9 employees which enters into an agreement with the community 6 10 college. 6 1112.9. "Program costs" means all necessary and incidental 6 12 costs of providing program services. 6 1313.10. "Program services" includes but is not limited to 6 14 the following: 6 15a. New jobs training.6 16b.a.RetrainingTraining ofexisting workersemployees. 6 17c.b. Adult basic education and job-related instruction. 6 18d.c. Vocational and skill-assessment services and 6 19 testing. 6 20e.d. Training facilities, equipment, materials, and 6 21 supplies. 6 22f. On-the-job training.6 23g.e. Administrative expenses for the jobs training 6 24 program. 6 25h.f. Subcontracted services with institutions governed by 6 26 the state board of regents, private colleges or universities, 6 27 or other federal, state, or local agencies. 6 28i.g. Contracted or professional services. 6 2914.11. "Project" means a training arrangement which is 6 30 the subject of an agreement entered into between the community 6 31 college and a business to provide program services. 6 3215. "Retooling" means upgrading, modernizing, or expanding6 33a business to increase the production or efficiency of6 34business operations including, but not limited to, replacing6 35equipment, introducing new manufacturing processes, or7 1changing managerial procedures.7 216. "Retraining job" means a job with an existing business7 3that is substantially at risk of becoming displaced within the7 4following ten years due to the retooling of the business.7 5 Sec. 9. Section 260F.3, Code 1995, is amended by striking 7 6 the section and inserting in lieu thereof the following: 7 7 260F.3 AGREEMENT. 7 8 A community college may enter into an agreement to 7 9 establish a project. An agreement shall provide for, but is 7 10 not limited to, the following: 7 11 1. Date of agreement. 7 12 2. Anticipated number of employees to be trained. 7 13 3. Estimated cost of training. 7 14 4. Anticipated dates of commencement and termination of 7 15 training. 7 16 5. Other criteria established by the department. 7 17 Sec. 10. Section 260F.6, subsection 2, Code Supplement 7 18 1995, is amended to read as follows: 7 19 2. To provide funds for the present payment of the costs 7 20 of a training program by the business, the community college 7 21 may provide to the business an advance of the moneys to be 7 22 used to pay for the program costs as provided in the 7 23 agreement. To receive the funds for this advance from the job 7 24 training fund established in subsection 1, the community 7 25 college shall submit an application to the department of 7 26 economic development. The amount of the advance shall not 7 27 exceedfiftytwenty-five thousand dollars for anyproject7 28 business site, or fifty thousand dollars within a three- 7 29 fiscal-year period for any business site.The advance, if the7 30agreement provides it as a loan, shall be repaid with interest7 31from the sources provided in the agreement. The rate of7 32interest to be charged for advances made in a calendar month7 33is equal to one-half of the average rate of interest on tax7 34exempt certificates issued by community colleges pursuant to7 35chapter 260E for the previous twelve months. The rate shall8 1be computed by the department of economic development.If the 8 2 project involves a consortium of businesses, the maximum award 8 3 per project shall not exceed fifty thousand dollars. 8 4 Participation in a consortium does not affect a business 8 5 site's eligibility for individual project assistance. Prior 8 6 to approval a business shall agree to match program amounts in 8 7 accordance with criteria established by the department. 8 8 Sec. 11. NEW SECTION. 260F.6A BUSINESS NETWORK TRAINING. 8 9 The community colleges and the department are authorized to 8 10 fund business network training projects which include five or 8 11 more businesses and are located in three or more contiguous 8 12 community college districts or two or more noncontiguous 8 13 community college districts. The community colleges shall use 8 14 their allocations provided for in this chapter to fund 8 15 projects under this section. A business network training 8 16 project must have a designated organization or lead business 8 17 to serve as the administrative entity that will coordinate the 8 18 training program. The businesses must have common training 8 19 needs and develop a plan to meet those needs. The department 8 20 shall adopt rules governing this section's operation and 8 21 participant eligibility. 8 22 Sec. 12. Section 260F.7, Code 1995, is amended to read as 8 23 follows: 8 24 260F.7 DEPARTMENT OF ECONOMIC DEVELOPMENT TO COORDINATE. 8 25 The department of economic development, in consultation 8 26 with the department of education and the division of job 8 27 service of the department of employment services, shall 8 28 coordinate the jobs training program. A project shall not be 8 29 funded under this chapter unless the department of economic 8 30 development approves the project. The departmentof economic8 31developmentshall adopt rules pursuant to chapter 17Athat the8 32community college will use in developing projects with new and8 33expanding small business new jobs training proposals or8 34existing business retraining proposalsgoverning the program's 8 35 operation and eligibility for participation in the program. 9 1 The department shall establish by rule criteria for 9 2 determining what constitutes an eligible business.A project9 3shall not be funded under this chapter unless the department9 4approves the project. The department shall establish by rule9 5criteria for approval of projects. The department may adopt9 6any rule effective immediately upon filing with the9 7administrative rules coordinator or at a subsequent stated9 8date prior to indexing and publication, or at a stated date9 9less than thirty-five days after filing, indexing, and9 10publication. The department of economic development shall9 11prepare an annual report for the governor and general assembly9 12on the activities and the future anticipated needs of this9 13jobs training program.9 14 Sec. 13. Section 260F.8, Code 1995, is amended to read as 9 15 follows: 9 16 260F.8 ALLOCATION. 9 17 1. Fortheeach fiscal yearbeginning July 1, 1992, and9 18subsequent years, the departmentof economic developmentshall 9 19 make funds available to the community colleges. The 9 20 department shall allocate by formulaat the beginning of the9 21fiscal yearfrom the moneys in the fund an amount for each 9 22merged areacommunity college to be used to provide the 9 23 financial assistance for proposals of businesseslocated in9 24the merged areawhose applications have been approved by the 9 25 department. The financial assistance shall be provided by the 9 26 department from the amount set aside for thatmerged area9 27 community college. If any portion of the moneys set aside for 9 28 amerged areacommunity college have not been used or 9 29 committed byMarchMay 1 of the fiscal year, that portion is 9 30 available for use by the department to provide financial 9 31 assistance to businesses located in othermerged areas9 32 community college districts. The department shall adopt by 9 33 rule a formula for this set-asidebased on population and per9 34capita income of the merged area. 9 35 2. Moneys available to the community colleges for this 10 1 program may be used to providegrantsforgivable loans to 10 2 trainfor new jobs or retain existing jobs when the project10 3costs are less than five thousand dollarsemployees.If the10 4project is for a consortium of businesses, project costs shall10 5not exceed an average of five thousand dollars per business.10 6 Sec. 14. Section 403.19, subsection 1, paragraph c, Code 10 7 1995, is amended to read as follows: 10 8 c. For the purposes of dividing taxes undersections10 9 section 260E.4and 260F.4, the applicable assessment roll for 10 10 purposes of paragraph "a" shall be the assessment roll as of 10 11 January 1 of the calendar year preceding the first written 10 12 agreement providing that all or a portion of program costs are 10 13 to be paid for by incremental property taxes. The community 10 14 college shall file a copy of the agreement with the 10 15 appropriate assessor. The assessor may, within fourteen days 10 16 of such filing, physically inspect the applicable taxable 10 17 business property. If upon such inspection the assessor 10 18 determines that there has been a change in the value of the 10 19 property from the value as shown on the assessment roll as of 10 20 January 1 of the calendar year preceding the filing of the 10 21 agreement and such change in value is due to new construction, 10 22 additions or improvements to existing structures, or 10 23 remodeling of existing structures for which a building permit 10 24 was required, the assessor shall promptly determine the value 10 25 of the property as of the inspection in the manner provided in 10 26 chapter 441 and that value shall be included for purposes of 10 27 the jobs training project in the assessed value of the 10 28 employer's taxable business property as shown on the 10 29 assessment roll as of January 1 of the calendar year preceding 10 30 the filing of the agreement. The assessor, within thirty days 10 31 of such filing, shall notify the community college and the 10 32 employer or business of that valuation which shall be included 10 33 in the assessed valuation for purposes of this subsection and 10 34 section 260E.4or 260F.4. The value determined by the 10 35 assessor shall reflect the change in value due solely to new 11 1 construction, additions or improvements to existing 11 2 structures, or remodeling of existing structures for which a 11 3 building permit was required. 11 4 Sec. 15. Section 422.16A, Code Supplement 1995, is amended 11 5 to read as follows: 11 6 422.16A JOB TRAINING WITHHOLDING – CERTIFICATION AND 11 7 TRANSFER. 11 8 Upon payment in full of a certificate of participation or 11 9 other obligation issued to fund a job training program under 11 10 chapter 260E, the community college providing the job training 11 11 program shall notify the department of economic development of 11 12 the amount paid by the employer or business to the community 11 13 college to retire the certificate during thepreviouslast 11 14 twelve months of withholding collections. The department of 11 15 economic development shall notify the department of revenue 11 16 and finance of that amount. The department shall credit to 11 17 the workforce development fund established in section 15.343 11 18 twenty-five percent of that amount each quarter for a period 11 19 of ten years. If the amount of withholding from the business 11 20 or employer is insufficient, the department shall prorate the 11 21 quarterly amount credited to the workforce development fund. 11 22The maximum amount from all employers which shall be11 23transferred to the workforce development fund in any year is11 24two million dollars.11 25 Sec. 16. Section 427B.17, subsection 7, Code Supplement 11 26 1995, is amended to read as follows: 11 27 7. For the purpose of dividing taxes under section 260E.4 11 28or 260F.4, the employer's or business's valuation of property 11 29 defined in section 427A.1, subsection 1, paragraphs "e" and 11 30 "j", and used to fund a new jobs training project which 11 31 project's first written agreement providing for a division of 11 32 taxes as provided in section 403.19 is approved on or before 11 33 June 30, 1995, shall be limited to thirty percent of the net 11 34 acquisition cost of the property. An employer's or business's 11 35 taxable property used to fund a new jobs training project 12 1 shall not be valued pursuant to subsection 2 or 3, whichever 12 2 is applicable, until the assessment year following the 12 3 calendar year in which the certificates or other funding 12 4 obligations have been retired or escrowed. The taxpayer's 12 5 valuation for such property shall then be the valuation 12 6 specified in subsection 1 for the applicable assessment year. 12 7 If the certificates issued, or other funding obligations 12 8 incurred, between January 1, 1982, and June 30, 1995, are 12 9 refinanced or refunded after June 30, 1995, the valuation of 12 10 such property shall then be the valuation specified in 12 11 subsection 2 or 3, whichever is applicable, for the applicable 12 12 assessment year beginning with the assessment year following 12 13 the calendar year in which those certificates or other funding 12 14 obligations are refinanced or refunded after June 30, 1995. 12 15 Sec. 17. 1995 Iowa Acts, chapter 184, section 12, is 12 16 repealed. 12 17 Sec. 18. REPEALS. Sections 260F.4 and 260F.5, Code 1995, 12 18 are repealed. 12 19 EXPLANATION 12 20 This bill makes changes and additions to department of 12 21 economic development programs. The bill provides as follows: 12 22 Sections 15.343 and 422.16A are amended to remove the $2 12 23 million per year cap on the amount which can be transferred 12 24 into the workforce development fund from employer withholding 12 25 amounts previously used to retire job training program 12 26 certificates under chapter 260E. The bill also repeals the 12 27 provisions enacted as part of House File 573 in 1995 which 12 28 sunset the workforce development fund program in 1997. 12 29 The bill creates an innovative skill development account to 12 30 the workforce development fund program. Moneys in the account 12 31 shall be used to fund business network training and other 12 32 innovative skill development training for Iowa businesses. 12 33 Section 15E.112 is amended to provide that not more than 12 34 four percent (currently one percent) of the total moneys 12 35 available to the support value-added agricultural products and 13 1 processes program during each quarter may be used for 13 2 administration of the program. The bill also provides that 13 3 one and one-quarter percent of the moneys available for the 13 4 value-added agricultural products and processes program during 13 5 each quarter may be used to fund a microbusiness rural 13 6 enterprise assistance program. 13 7 New section 15E.113 provides that the department may 13 8 contract with a microbusinesses organization which meets 13 9 certain criteria, including a track record of assistance to 13 10 microbusinesses, to establish a program of assistance to rural 13 11 microbusinesses. Microbusinesses are defined by the bill as 13 12 service businesses employing five or fewer full-time 13 13 equivalent employees with the need for up to $25,000 in 13 14 assistance. The department is to report to the general 13 15 assembly regarding the activities of the program. Further, 13 16 moneys allocated to the program are not to revert to the 13 17 general fund. 13 18 The bill provides for a supplemental new jobs credit from 13 19 income tax withholding. The credit would be used to fund job 13 20 training projects of the type provided in chapter 260E 13 21 (industrial new jobs training). 13 22 The bill renames chapter 260F the Iowa jobs training Act 13 23 and makes several changes to the chapter including the 13 24 following: 13 25 1. Businesses which are eligible for assistance are those 13 26 which are currently training existing employees, rather than 13 27 employees in new jobs. The bill provides that a business is 13 28 ineligible for assistance if the business is involved in a 13 29 strike, lockout, or other labor dispute and that program funds 13 30 shall not be used to train replacement workers hired as part 13 31 of a labor dispute. 13 32 2. The bill eliminates the tax increment financing 13 33 provisions currently used to provide program funds under the 13 34 chapter. The new jobs credit from withholding is also 13 35 eliminated. This provision allowed 1.50 percent of the gross 14 1 wages paid to each employee in a new job training project to 14 2 be credited to the cost of the training project. The 14 3 department of economic development shall allocate funds for 14 4 projects under the chapter. 14 5 3. The bill also provides for training of groups of 14 6 businesses and for providing a maximum amount of assistance 14 7 for businesses participating in training under chapter 260F 14 8 would be $25,000 per business with a cap of $50,000 per three- 14 9 year period. 14 10 LSB 3417HV 76 14 11 mk/cf/24
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