Text: SF02433 Text: SF02435 Text: SF02400 - SF02499 Text: SF Index Bills and Amendments: General Index Bill History: General Index
Get Version To Print
PAG LIN 1 1 Section 1. NEW SECTION. 15E.181 TITLE OF ACT. 1 2 This division shall be known and may be cited as the 1 3 "Economic Development Enterprise Zone Act". 1 4 Sec. 2. NEW SECTION. 15E.182 PURPOSE. 1 5 The purpose of the economic development enterprise zone Act 1 6 is to promote new economic development and create jobs paying 1 7 family-supporting wages in economically distressed areas by 1 8 encouraging communities to target resources and planning 1 9 strategies in ways that attract economically productive 1 10 private investment. 1 11 Sec. 3. NEW SECTION. 15E.183 ELIGIBILITY CRITERIA. 1 12 1. A county may create an economic development enterprise 1 13 zone by designating up to one percent of the county area for 1 14 that purpose. A county may establish more than one enterprise 1 15 zone, however, the total amount of county area designated as 1 16 enterprise zones shall not exceed one percent of the county 1 17 area. An enterprise zone shall only be established on 1 18 commercial or industrial property or property that is planned 1 19 for future commercial or industrial development. 1 20 2. An enterprise zone shall only be formed in an area of 1 21 the county which meets at least one of the following criteria: 1 22 a. The county has an unemployment rate of at least one 1 23 hundred fifty percent of the state unemployment rate. 1 24 b. The county has experienced a population loss of ten 1 25 percent or greater between the 1980 and 1990 censuses. 1 26 c. At least twenty percent of the population of the county 1 27 is economically disadvantaged. For the purposes of this 1 28 division, "economically disadvantaged" means the same as in 1 29 section 7B.2, subsection 3. 1 30 d. At least fifteen percent of the residents in the area 1 31 designated as an enterprise zone earn less than the average 1 32 wage in the state. 1 33 3. The county shall do the following regarding an 1 34 enterprise zone: 1 35 a. Certify to the department of revenue and finance that 2 1 an area designated as an enterprise zone meets at least one of 2 2 the requirements of subsection 2 and that a business which has 2 3 entered into an agreement with the county to locate or expand 2 4 in an enterprise zone is an eligible business under section 2 5 15E.184. 2 6 b. Provide annual recertification to the department of 2 7 revenue and finance that the area remains eligible for 2 8 designation as an enterprise zone and that each business 2 9 receiving assistance remains an eligible business. 2 10 c. Monitor the enterprise zone and each eligible business 2 11 for compliance with the requirements for establishing an 2 12 enterprise zone or with the agreement between the business and 2 13 the county. 2 14 d. Decertify the enterprise zone when the area no longer 2 15 meets any of the requirements for an enterprise zone. 2 16 e. Notify the department of revenue and finance that an 2 17 eligible business has not complied with the agreement entered 2 18 into with the county for the purposes of the sanctions imposed 2 19 in section 15E.185. 2 20 4. A county may enter into an agreement with a local 2 21 economic development organization for the organization to 2 22 perform the duties of the county under subsection 3. 2 23 Sec. 4. NEW SECTION. 15E.184 ELIGIBLE BUSINESS. 2 24 Only a business which is or will be located in an 2 25 enterprise zone and which meets the following requirements 2 26 shall receive assistance under this division: 2 27 1. The business has not closed or substantially reduced 2 28 its operation in one area of the state and relocated 2 29 substantially the same operation in the enterprise zone. This 2 30 subsection does not prohibit a business from expanding its 2 31 operation in the enterprise zone if existing operations of a 2 32 similar nature in the state are not closed or substantially 2 33 reduced. 2 34 2. Provide and pay at least eighty percent of the cost of 2 35 a standard medical and dental insurance plan for all full-time 3 1 employees working at the facility in the enterprise zone. 3 2 3. The business shall agree to pay, within two years of 3 3 the date the business begins operations in the facility in the 3 4 enterprise zone, an average wage for new full-time hourly 3 5 nonmanagement employees of at least the average state hourly 3 6 wage. For the purposes of this division, "begins operations" 3 7 means the date upon which the business informs the county and 3 8 the department of revenue and finance that its facility is 3 9 ready to begin the operations for which it was designed. 3 10 4. The business will make a capital investment at a 3 11 facility in the enterprise zone of at least five hundred 3 12 thousand dollars. If the business is occupying a vacant 3 13 building suitable for industrial use, the fair market value of 3 14 the building shall be counted toward the capital investment 3 15 threshold. 3 16 5. The business shall agree to create at least twenty-five 3 17 full-time positions at the facility in the enterprise zone for 3 18 a specified period of time which will be negotiated with the 3 19 county, but which shall be at least five years. 3 20 Sec. 5. NEW SECTION. 15E.185 AGREEMENT – NONCOMPLIANCE 3 21 – PENALTIES. 3 22 A business shall enter into an agreement with the county 3 23 specifying the requirements which must be met to satisfy the 3 24 criteria of section 15E.184. The agreement shall contain the 3 25 following provisions: 3 26 1. If the business has not met more than ninety percent of 3 27 the job creation requirement in section 15E.184, the business 3 28 shall pay a percentage of the assistance received under 3 29 section 15E.190, or if the business does not receive the 3 30 assistance under section 15E.190, then under section 15E.186 3 31 as follows: 3 32 a. If the business has met fifty percent or less of the 3 33 requirement, the business shall pay the same percentage in 3 34 assistance as the business failed to create in jobs. 3 35 b. If the business has met more than fifty percent but not 4 1 more than seventy-five percent of the requirement, the 4 2 business shall pay one half of the percentage in assistance as 4 3 the business failed to create in jobs. 4 4 c. If the business has met more than seventy-five percent 4 5 but not more than ninety percent of the requirement, the 4 6 business shall pay one quarter of the percentage in assistance 4 7 as the business failed to create in jobs. 4 8 2. If a business does not meet the wage requirement of 4 9 section 15E.184, in any one year, it must meet that 4 10 requirement in the following year or forfeit the assistance 4 11 for that year. 4 12 The department of revenue and finance shall adopt rules for 4 13 repayment of assistance by the business if the business does 4 14 not meet the requirements of section 15E.184. 4 15 Sec. 6. NEW SECTION. 15E.186 NEW JOBS CREDIT FROM 4 16 WITHHOLDING. 4 17 An eligible business may enter into an agreement with the 4 18 department of revenue and finance and a community college, for 4 19 a supplemental new jobs credit from withholding from jobs 4 20 created in the enterprise zone. The agreement shall be for 4 21 program services for an additional job training project, as 4 22 defined in chapter 260E. The agreement shall provide for the 4 23 following: 4 24 1. That the project shall be administered in the same 4 25 manner as a project under chapter 260E and that a supplemental 4 26 new jobs credit from withholding in an amount equal to one and 4 27 one-half percent of the gross wages paid by the eligible 4 28 business pursuant to section 422.16 is authorized to fund the 4 29 program services for the additional project. 4 30 2. That the supplemental new jobs credit from withholding 4 31 shall be collected, accounted for, and may be pledged by the 4 32 community college in the same manner as described in section 4 33 260E.5. 4 34 3. That the auditor of state shall perform an annual audit 4 35 regarding the manner in which the training funds are being 5 1 used. 5 2 To provide funds for the payment of the costs of the 5 3 additional project, a community college may borrow money, 5 4 issue and sell certificates, and secure the payment of the 5 5 certificates in the same manner as described in section 5 6 260E.6, including, but not limited to, providing the 5 7 assessment of an annual levy as described in section 260E.6, 5 8 subsection 4. The program and credit authorized by this 5 9 section is in addition to, and not in lieu of, the program and 5 10 credit authorized in chapter 260E. 5 11 Sec. 7. NEW SECTION. 15E.187 INVESTMENT TAX CREDIT. 5 12 An eligible business may claim a corporate tax credit up to 5 13 a maximum of ten percent of the new investment related to the 5 14 location or expansion of an eligible business in an enterprise 5 15 zone. Any credit in excess of the tax liability for the tax 5 16 year may be credited to the tax liability for the following 5 17 twenty years or until depleted, whichever occurs earlier. If 5 18 the business is a partnership, subchapter S corporation, 5 19 limited liability company, or estate or trust electing to have 5 20 the income taxed directly to the individual, an individual may 5 21 claim the tax credit allowed. The amount claimed by the 5 22 individual shall be based upon the pro rata share of the 5 23 individual's earnings of the partnership, subchapter S 5 24 corporation, limited liability company, or estate or trust. 5 25 For purposes of this section, "new investment related to the 5 26 location or expansion of an eligible business in an enterprise 5 27 zone" means the cost of machinery and equipment, as defined in 5 28 section 427A.1, subsection 1, paragraphs "e" and "j", 5 29 purchased for use in the operation of the eligible business, 5 30 the purchase price of which has been depreciated in accordance 5 31 with generally accepted accounting principles, and the cost of 5 32 improvements made to real property which is used in the 5 33 operation of the eligible business and which receives the 5 34 property tax exemption under section 15E.188. 5 35 Sec. 8. NEW SECTION. 15E.188 PROPERTY TAX EXEMPTION. 6 1 The county may exempt from taxation all or a portion of the 6 2 property upon which an eligible business locates or expands in 6 3 an enterprise zone and which is used in the operation of the 6 4 eligible business. The exemption may be allowed for a period 6 5 not to exceed ten years beginning the year the eligible 6 6 business enters into an agreement with the county to locate or 6 7 expand operations in an enterprise zone. 6 8 Sec. 9. NEW SECTION. 15E.189 RESEARCH ACTIVITIES CREDIT. 6 9 An eligible business may claim a corporate tax credit for 6 10 increasing research activities in an enterprise zone during 6 11 the period the eligible business is located in an enterprise 6 12 zone. The credit equals thirteen percent of the state's 6 13 apportioned share of the qualifying expenditures for 6 14 increasing research activities. The state's apportioned share 6 15 of the qualifying expenditures for increasing research 6 16 activities is a percent equal to the ratio of qualified 6 17 research expenditures in this state to total qualified 6 18 research expenditures. The credit authorized in this section 6 19 is in lieu of the credit authorized in section 422.33, 6 20 subsection 5. If the eligible business is a partnership, 6 21 subchapter S corporation, limited liability company, or estate 6 22 or trust electing to have the income taxed directly to the 6 23 individual, an individual may claim the tax credit allowed. 6 24 The amount claimed by the individual shall be based upon the 6 25 pro rata share of the individual's earnings of the 6 26 partnership, subchapter S corporation, limited liability 6 27 company, or estate or trust. Any credit in excess of the tax 6 28 liability for the tax year shall be refunded with interest 6 29 computed under section 422.25. In lieu of claiming a refund, 6 30 the eligible business may elect to have the overpayment shown 6 31 on its final return credited to its tax liability for the 6 32 following tax year. 6 33 For the purposes of this section, "qualifying expenditures 6 34 for increasing research activities" means the qualifying 6 35 expenditures as defined for the federal credit for increasing 7 1 research activities which would be allowable under section 41 7 2 of the Internal Revenue Code in effect on January 1, 1996. 7 3 Sec. 10. NEW SECTION. 15E.190 SALES, SERVICES, AND USE 7 4 TAX REFUND – CONTRACTOR OR SUBCONTRACTOR. 7 5 1. An eligible business under section 15E.184 shall be 7 6 entitled to a refund of the taxes paid under chapters 422 and 7 7 423 for gas, electricity, water, or sewer utility services, 7 8 goods, wares, or merchandise, or on services rendered, 7 9 furnished, or performed to or for a contractor or 7 10 subcontractor and used in the fulfillment of a written 7 11 contract relating to the construction or equipping of a 7 12 facility within an enterprise zone. Taxes attributable to 7 13 intangible property and furniture and furnishings shall not be 7 14 refunded. 7 15 2. To receive the refund a claim shall be filed by the 7 16 eligible business with the department of revenue and finance 7 17 as follows: 7 18 a. The contractor or subcontractor shall state under oath, 7 19 on forms provided by the department, the amount of the sales 7 20 of goods, wares, or merchandise or services rendered, 7 21 furnished, or performed including water, sewer, gas, and 7 22 electric utility services for use in the enterprise zone upon 7 23 which sales or use tax has been paid prior to the date the 7 24 eligible business begins operations, and shall file the forms 7 25 with the eligible business before final settlement is made. 7 26 b. The eligible business shall, not more than six months 7 27 after the date the eligible business begins operation, make 7 28 application to the department of revenue and finance for any 7 29 refund of the amount of the taxes paid pursuant to chapter 422 7 30 or 423 upon any goods, wares, or merchandise, or services 7 31 rendered, furnished, or performed, including water, sewer, 7 32 gas, and electric utility services. The application shall be 7 33 made in the manner and upon forms to be provided by the 7 34 department, and the department shall audit the claim and, if 7 35 approved, issue a warrant to the eligible business in the 8 1 amount of the sales or use tax which has been paid to the 8 2 state of Iowa under a contract. A claim filed by the eligible 8 3 business in accordance with this subsection shall not be 8 4 denied by reason of a limitation provision set forth in 8 5 chapter 421, 422, or 423. 8 6 c. A contractor or subcontractor who willfully makes a 8 7 false report of tax paid under the provisions of this 8 8 subsection is guilty of a simple misdemeanor and in addition 8 9 is liable for the payment of the tax and any applicable 8 10 penalty and interest. 8 11 EXPLANATION 8 12 This bill provides for the establishment of economic 8 13 development enterprise zones in counties which have an 8 14 unemployment rate which is one and a half times the state 8 15 average, which have had a 10 percent population loss between 8 16 1980 and 1990, which have 15 percent or more of the residents 8 17 of the area to be designated as an enterprise zone earning 8 18 less than the state average wage, or which have at least 20 8 19 percent of the county population classified as economically 8 20 disadvantaged for purposes of the job training partnership 8 21 program (chapter 7B). Economically disadvantaged includes 8 22 receiving welfare payments, food stamps, or being below the 8 23 federal poverty level. 8 24 A county can designate up to one percent of the area of the 8 25 county as one or more enterprise zones. Enterprise zones can 8 26 only be located in areas zoned industrial or commercial or 8 27 which are planned for use as future business property. 8 28 A county establishing an enterprise zone would certify its 8 29 eligibility to the department of revenue and finance and 8 30 monitor compliance by businesses receiving enterprize zone 8 31 benefits and continuing eligibility of the counts for 8 32 enterprize zones. 8 33 The bill also provides that businesses must agree to meet 8 34 certain requirements to be eligible for enterprize zone 8 35 benefits, including paying at least 80 percent of the cost of 9 1 medical and dental benefits, pay average wages to full-time 9 2 nonmanagement employees of at least the average state hourly 9 3 wage, and create at least 25 new jobs. Businesses which do 9 4 not meet the agreed to requirements forfeit some of the 9 5 benefits received by the business. 9 6 Enterprise zone benefits include a supplemental new jobs 9 7 credit from income tax withholding of 1.5 percent to be used 9 8 for job training projects under chapter 260E (industrial new 9 9 jobs training), an investment tax credit against the business 9 10 income tax liability equal to 10 percent of the new investment 9 11 by the business in the enterprize zone, an exemption from 9 12 property taxes, if agreed to by the county, and a refund of 9 13 sales, service, and use taxes paid on materials used to 9 14 construct or equip a facility in the enterprize zone. 9 15 LSB 3195SV 76 9 16 mk/jw/5.2
Text: SF02433 Text: SF02435 Text: SF02400 - SF02499 Text: SF Index Bills and Amendments: General Index Bill History: General Index
© 1996 Cornell College and League of Women Voters of Iowa
Comments? webmaster@legis.iowa.gov.
Last update: Wed Mar 27 03:20:03 CST 1996
URL: /DOCS/GA/76GA/Legislation/SF/02400/SF02434/960304.html
jhf