1996 SUMMARY OF LEGISLATION

ECONOMIC DEVELOPMENT

ECONOMIC DEVELOPMENT LEGISLATION

SENATE FILE 2351 - Economic Development Programs (full text of bill)

BY COMMITTEE ON SMALL BUSINESS, ECONOMIC DEVELOPMENT AND TOURISM. This Act makes changes and additions to several economic development programs, including the Workforce Development Fund Program and the Iowa Small Business New Jobs Training Act, and provides a supplemental new jobs credit from income tax withholding.
The Act establishes the Workforce Development Fund Account in the Office of the Treasurer of State to receive repayment moneys under Section 422.16A, up to a maximum of $10 million per year. Section 422.16A is amended to provide that employer withholding amounts formerly used to repay a certificate of participation under Chapter 260E shall be transferred to the Workforce Development Fund Account instead of the Workforce Development Fund. The Act also provides that moneys from the Workforce Development Fund Account may be appropriated to the Workforce Development Fund.
The Act provides that the assets of the Workforce Development Fund shall be used for training and retraining programs for targeted industries, job training projects under Chapter 260F, the Iowa Small Business New Jobs Training Act, apprenticeship programs including new or statewide building trades apprenticeship programs, and innovative skill development activities. The Act also repeals the sunset, which was to occur in 1997, of the Workforce Development Fund Program.
The Act eliminates the Loan Loss Reserve Program as a component of the Workforce Development Fund.
The Act amends Section 15.343 to require the Director of the Department of Economic Development to submit the proposed allocation of funds from the Workforce Development Fund for the next fiscal year to the Economic Development Board by January 1 of each year and notwithstands the requirement in Section 8.39 that approval from the Governor or Department of Management be obtained prior to transferring allocations between programs.
The Act requires the Department of Economic Development to use customer tracking information from the Department of Workforce Development to track, to the extent possible, individuals and businesses who have received assistance or services through the Workforce Development Fund to determine whether the assistance or services have resulted in increased wages paid to the individuals or paid by the businesses.
The Act creates a supplemental new jobs credit from withholding for eligible employers equal to 1.5 percent of the gross wages paid by the employer to be used to fund job training program services. The supplemental credit from withholding is to be administered in the same manner as the new jobs credit under Chapter 260E and is in addition to and not in lieu of that credit. To be eligible, the employer must agree to pay wages equal to at least the average county wage or the average regional wage, whichever is lower.
The Act renames Chapter 260F the "Iowa Jobs Training Act" and makes the following changes to the chapter:

• Businesses eligible for assistance are those currently training existing employees, rather than employees in new jobs. The Act provides that a business is ineligible for assistance if the business closes or substantially reduces employment to relocate to another area of the state or is involved in a strike, lockout or other labor dispute in Iowa. The Act prohibits the use of program funds to train replacement workers hired as part of a labor dispute.
• Tax increment financing is eliminated as a means, under Chapter 260F, to provide program funds. The new jobs credit from withholding is also eliminated. This provision allowed 1.5 percent of the gross wages paid to each employee in a new job training project to be credited to the cost of the training project. The Department of Economic Development shall allocate funds for projects under Chapter 260F.
• Training projects operated by community colleges for groups of businesses are authorized under Chapter 260F. The maximum amount of assistance for businesses participating in training is set at $25,000 per business with a cap of $50,000 per three-year period.

SENATE FILE 2464 - Housing Development and Related Matters (full text of bill)

BY COMMITTEE ON APPROPRIATIONS. This Act contains several provisions regarding housing development.
The Act makes several changes to Chapter 358C regarding real estate improvement districts, including the following:

• The Act repeals the pilot program which limits the establishment of real estate improvement districts to six counties, allowing the statewide establishment of real estate improvement districts. The Act also provides that real estate improvement districts cannot be created after June 30, 2000.
• The Act provides that a person proposed to be a trustee, successor trustee, or to fill a vacancy on the board of trustees must disclose, prior to selection as a trustee, any financial interest the person has in a developer or contractor who may receive a contract for public improvements or other services in the district. A person proposed as a trustee, successor trustee, or to fill a vacancy on the board of trustees must also disclose the amount of land the person owns in the district.
• The Act requires real estate improvement districts to allow the building of manufactured homes by forbidding action by the board of trustees of the district to prohibit or restrict the construction of manufactured homes.
• The Act prohibits the board of a real estate improvement district from entering into a contract for public improvements or other development services with a person owning more than 25 percent of the land in the district without competitive bidding.
• The Act requires the existence of a special assessment to be recorded, regarding each lot, in the county in which the real estate improvement district is located. The Act also provides that the special assessment lien held by the district against a parcel of property shall only be for that part of the special assessment which has come due but is not yet paid, not for the total amount of the special assessment.
• The Act requires a city to notify all public utilities service areas to be annexed by the city 60 days prior to the annexation. Failure to provide timely notice provides the utility 60 days from the notice to adjust its tax and accounting records to reflect the annexation.
• The Act provides that the existence of a special assessment against property in a district must be disclosed to a potential buyer.

The provisions of the Act relating to real estate improvement districts take effect May 30, 1996
The Act makes several changes to Chapter 403 regarding urban renewal, including the following:

• The Act provides that public hearings are to be held on a proposed urban renewal plan, rather than on each urban renewal project undertaken in accordance with the plan.
• The Act requires the municipality to make a finding that acquisition of land for residential uses is essential to the municipality's urban renewal plan. Section 11 also requires the municipality to find that one of four conditions exist, including that the provision of public improvements related to housing and residential development will encourage residential development and the retention or relocation of industrial or commercial enterprises or that the area to be acquired under the plan is necessary to provide for the construction of low and moderate income housing.
• The Act requires a public notice and hearing before bonds may be issued for urban renewal and provides a 15-day window, following the decision of the municipality to take additional action to issue the bonds, for a resident or property owner to appeal the additional action to the district court. The additional action is final and conclusive unless the court finds that the municipality exceeded its authority.
• The Act adds public improvements related to housing development to the definition of economic development area and makes construction of low and moderate income housing an alternative use (along with commercial and industrial enterprises and public improvements for housing) for an economic development area. The division of revenue under tax increment financing based upon a finding that the area is an economic development area is limited to 20 years.
• The Act adds low and moderate income housing assistance to the uses for which revenue from tax increment financing may be used and sets out the manner in which assistance for public improvements related to housing and residential development, low and moderate income and otherwise, may be provided. Tax increment financing for housing or residential development is not allowed unless the municipality assures that the project will include assistance for low and moderate income family housing in an amount either based on the percentage of low and moderate income persons in the county or in some other amount as determined by the municipality and agreed to by the Department of Economic Development. Assistance for low and moderate income housing may take many forms, including lots for low and moderate income housing within or outside the urban renewal area or payments to a low and moderate income housing fund established by the municipality. Funding sources may include revenue from tax increment financing or any other legal source. Tax increment financing for housing projects is limited in duration to 10 years.

The provisions of the Act relating to urban renewal take effect May 30, 1996.
The Act provides that counties may utilize the abatement procedure regarding property which is abandoned or deemed to constitute a public nuisance currently only available to cities, neighboring landowners, and nonprofit housing corporations. The county may file a petition for abatement if the property is located outside the limits of a city and is either abandoned and in violation of the housing code applicable to the county or is deemed a public nuisance.
The Act also provides that cities may use their eminent domain powers to condemn residential buildings found to be a public nuisance.
The Act provides that counties may dispose of single or multifamily housing acquired by the county through a request for bids process.
The Act makes the establishment or funding of housing programs as part of a municipal housing project under Chapter 403 or otherwise an essential city or county purpose.
The Act permits the board of supervisors in a county to provide that property acquired and subdivided for housing development continue to be assessed for taxation as the property was assessed prior to the subdivision for housing until the lot is sold or a specified period of time elapses. This period is five years in counties with populations under 20,000 and three years in counties with populations of 20,000 or over.
The Act provides that counties may abate property taxes on single and multifamily housing in the same manner as cities unless the property is located within city limits. This provision takes effect May 30, 1996.
The Act provides that land, acquired after a city has adopted a revitalization plan, which covers the entire city shall automatically be included in the revitalization plan.
The Act provides that, for the purposes of urban revitalization tax exemptions for improvements to property, the value of the property for the purposes of the exemption shall be the lower of the assessed value of the property in the year the improvements are begun or the price paid by the owner of the property in an arm's length sale. This provision applies to tax exemptions granted on or after January 1, 1995.
The Act appropriates $1 million for the fiscal year beginning July 1, 1995, and ending June 30, 1996, to the Iowa Finance Authority to assist counties in establishing housing councils. Moneys not obligated or expended by the Authority for this purpose by June 30, 1997, shall be transferred to the Housing Improvement Fund within the Authority. This provision took effect May 30, 1996.

THE GOVERNOR ITEM VETOED THE FOLLOWING:
• 1. A provision creating a new program within the Iowa Finance Authority providing for moneys to be transferred to counties on a per capita basis for housing programs. Funding for this program would have come from proceeds from the real estate transfer tax diverted from the General Fund of the State to the Finance Authority.
• 2. A provision diverting two-thirds of the proceeds from the real estate transfer tax currently being deposited in the General Fund of the State to the Iowa Finance Authority. Sixty percent of the moneys would be used by the Authority to fund the per capita transfers to the counties and 40 percent would be used by the Authority for the Housing Improvement Fund. One-third of the proceeds would continue to be deposited in the General Fund of the State.

These provisions would have taken effect on July 1, 1997.

HOUSE FILE 2234 - Exemption From Land Ownership Restrictions (full text of bill)

BY COMMITTEE ON ECONOMIC DEVELOPMENT. This Act allows the Department of Economic Development to exempt a nonresident business from the restrictions on ownership of agricultural land for the purposes of the New Jobs and Income Program administered by the department. The business must otherwise be an eligible business under the program, must apply to be an exempt business before July 1, 1998, and must not be actively engaged in farming within the economic development area in which the business seeks to locate. The business may own up to 1,000 acres of land and may lease up to an additional 280 acres. The business must convert the land to a purpose other than farming within five years of acquisition unless the business receives an extension from the city or county in which the business is located and the Department of Economic Development.
The Department of Economic Development is to monitor the activities of businesses receiving the exemption and report annually to the General Assembly.

HOUSE FILE 2481 - New Jobs and Income Program (full text of bill)

BY COMMITTEE ON WAYS AND MEANS. This Act creates additional benefits to businesses that participate in the New Jobs and Income Program administered by the Department of Economic Development and authorizes the department to waive eligibility requirements in certain circumstances.
The Act provides that the business participating in the New Jobs and Income Program, or a supporting business, is entitled to a refund of sales, service and use taxes paid by a contractor or subcontractor in the performance of a written contract relating to the construction or equipping of a facility within an economic development area.
The Act authorizes the eligible business to claim as exempt from sales and use taxation, machinery and equipment which is exempt from property tax under the program.
The Act makes the research activities credit provided under the program, a refundable credit. In lieu of receiving a refund of corporate taxes paid, the business may have the amount of the overpaid taxes credited against next year's tax liability.
The Act provides that the department may waive, for good cause, the eligibility requirements relating to capital investment and jobs created for the program. The waiver shall not be below 15 jobs created or $3 million of capital investment. Good cause includes high unemployment in the community, a high poverty level in the community, an opportunity to use existing facilities, and lack of community growth.
The Act provides that for sales of machinery and equipment occurring on or after July 1, 1994, the machinery and equipment does not have to be taxable as real property to qualify for the exemption from the sales and use tax.

RELATED LEGISLATION

SENATE FILE 2409 - Workforce Development (Complete summary under LABOR & EMPLOYMENT.)

This Act creates the Department of Workforce Development. This new department replaces the current Department of Employment Services. In addition, the Act transfers certain responsibilities from the Department of Economic Development to the new Department of Workforce Development.

SENATE FILE 2449 - Tax Revisions and Related Matters (Complete summary under TAXATION.)

Division V of this Act appropriates $2 million annually to fund a livestock production tax credit for certain hog, beef, dairy, sheep, and poultry production operations. For the tax year beginning on or after January 1, 1996, the amount appropriated shall only be used to pay livestock production credit claims for cow-calf operations. The Division applies to tax years beginning on or after January 1, 1996.

SENATE FILE 2470 - Miscellaneous Appropriations and Related Matters -- Economic Development Appropriations (Complete summary under APPROPRIATIONS.)

This Act relates to public levy, expenditure and regulatory matters by making standing, economic development and other appropriations and includes a provision authorizing the use of Value-Added Agricultural Products and Processes Financial Assistance Fund moneys to develop a state-of-the-art beef processing plant and other provisions relating to economic development.

HOUSE FILE 2114 - Miscellaneous Supplemental Appropriations (Complete summary under APPROPRIATIONS.)

This Act includes a FY 1996 supplemental appropriation from the General Fund of the State to the Department of Economic Development for the Strategic Investment Fund and for promotional efforts associated with the Iowa Sesquicentennial.

HOUSE FILE 2177 - Urban Renewal -- Century Farm Exclusion (Complete summary under LOCAL GOVERNMENT.)

This Act provides that areas designated as economic development areas for purposes of urban renewal shall not contain land which is part of a century farm unless the owner agrees to include the farm in the urban renewal area. The Act applies to economic development areas designated before, on or after July 1, 1996.

HOUSE FILE 2383 - Deer and Wild Turkey Hunting Licenses (Complete summary under NATURAL RESOURCES AND OUTDOOR RECREATION. )

The Act rewrites the current provisions of hunting laws relating to the issuance of free deer hunting and wild turkey hunting licenses to landowners and tenants and provides for the allocation of 25 nonresident deer and wild turkey hunting licenses for visitors to the state interested in economic development.

HOUSE FILE 2397 - Linked Investments (Complete summary under BUSINESS, BANKING & INSURANCE.)

This Act makes changes to the Linked Investments Program in the Office of the Treasurer of State, including placing a two-year moratorium on linked investments under the Targeted Small Business Linked Investments Program and repealing the Main Street Linked Investments Loan Program.

HOUSE FILE 2433 - Waste Tires (Complete summary under ENVIRONMENTAL PROTECTION.)

This Act relates to the management of waste tires by providing for the establishment of a Waste Tire Management Fund. The Act also provides that a tire processor who annually processes more than 250,000 waste tires at a processing site located within the state may be awarded moneys at the rate of not more than 20 cents per passenger tire equivalent processed and delivered to a site of end use.

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Last update: Mon August 26, 1996
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