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PAG LIN
1 1 HOUSE FILE 724
1 2
1 3 AN ACT
1 4 RELATING TO INVESTMENTS IN COUNTIES AND CITIES BY PRO-
1 5 VIDING FOR THE ESTABLISHMENT OF ENTERPRISE ZONES IN
1 6 AREAS OF COUNTIES AND CITIES FOR WHICH TAX INCENTIVES
1 7 AND ASSISTANCE ARE AVAILABLE FOR ELIGIBLE BUSINESSES
1 8 LOCATING OR LOCATED IN THE ENTERPRISE ZONE.
1 9
1 10 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
1 11
1 12 Section 1. NEW SECTION. 15E.181 INTENT.
1 13 It is the intent of the general assembly that this division
1 14 be administered in a manner to promote new economic
1 15 development in economically distressed areas by encouraging
1 16 communities to target resources in ways that attract
1 17 productive private investment.
1 18 Sec. 2. NEW SECTION. 15E.182 ENTERPRISE ZONES.
1 19 1. A county may create an economic development enterprise
1 20 zone as authorized in this division, subject to certification
1 21 by the department of economic development, by designating up
1 22 to one percent of the county area for that purpose. A county
1 23 may establish more than one enterprise zone.
1 24 2. A city with a population of twenty-four thousand or
1 25 more, as shown by the 1990 certified federal census, may
1 26 create an economic development enterprise zone as authorized
1 27 in this division, subject to certification by the department
1 28 of economic development, by designating one or more contiguous
1 29 census tracts, as determined in the most recent federal census
1 30 or designating other geographic units approved by the
1 31 department of economic development, for that purpose. If
1 32 there is an area in the city which meets the requirements for
1 33 eligibility for an urban or rural enterprise community under
1 34 Title XIII of the federal Omnibus Budget Reconciliation Act of
1 35 1993, such area shall be designated by the state an economic
2 1 development enterprise zone. The area meeting the
2 2 requirements for eligibility for an urban or rural enterprise
2 3 community shall not be included for the purpose of determining
2 4 the area limitation pursuant to subsection 3. In creating an
2 5 enterprise zone, a city with a population of twenty-four
2 6 thousand or more, as shown by the 1990 certified federal
2 7 census, may designate as part of the area tracts or approved
2 8 geographic units located in a contiguous city if such tracts
2 9 or approved geographic units meet the criteria and the city
2 10 agrees to being included. The city may establish more than
2 11 one enterprise zone. Reference in this division to "city"
2 12 means a city with a population of twenty-four thousand or
2 13 more, as shown by the 1990 certified federal census.
2 14 3. A county or city may apply to the department for an
2 15 area to be certified as an enterprise zone at any time prior
2 16 to July 1, 2000. However, the total amount of land designated
2 17 as enterprise zones under subsections 1 and 2 shall not exceed
2 18 in the aggregate one percent of the total county area.
2 19 4. An enterprise zone designation shall remain in effect
2 20 for ten years following the date of certification. Any state
2 21 or local incentives or assistance that may be conferred must
2 22 be conferred before the designation expires. However, the
2 23 benefits of the incentive or assistance may continue beyond
2 24 the expiration.
2 25 Sec. 3. NEW SECTION. 15E.183 ELIGIBLE BUSINESS.
2 26 1. A business which is or will be located in an enterprise
2 27 zone is eligible to receive incentives and assistance under
2 28 this division if the business has not closed or reduced its
2 29 operation in one area of the state and relocated substantially
2 30 the same operation into the enterprise zone and if the
2 31 business meets all of the following:
2 32 a. Is not a retail business.
2 33 b. Pays at least eighty percent of the cost of a standard
2 34 medical and dental insurance plan for all full-time employees.
2 35 c. Pays an average wage that is at or greater than ninety
3 1 percent of the lesser of the average county wage or average
3 2 regional wage, as determined by the department. However, the
3 3 wage paid by the business shall not be less than seven dollars
3 4 and fifty cents per hour.
3 5 d. Creates at least ten full-time positions and maintains
3 6 them for at least ten years. For an existing business in
3 7 counties with a population of ten thousand or less, the
3 8 commission may adopt a provision that allows the business to
3 9 create at least five initial jobs with the additional jobs to
3 10 be added in five years. The business shall include in its
3 11 strategic plan the timeline for job creation. If the existing
3 12 business fails to meet the ten-job creation requirement within
3 13 the five-year period all incentives or assistance will cease
3 14 immediately.
3 15 e. Makes a capital investment of at least five hundred
3 16 thousand dollars. If the business will be occupying a vacant
3 17 building suitable for industrial use, the fair market value of
3 18 the building and land, not to exceed two hundred fifty
3 19 thousand dollars, shall be counted toward the capital
3 20 investment requirement. An existing business that has been
3 21 operating in the enterprise zone for at least five years is
3 22 exempt from the capital investment requirement of this
3 23 paragraph of up to two hundred fifty thousand dollars of the
3 24 fair market value, as established by an appraisal, of the
3 25 building and land.
3 26 2. In addition to meeting the requirements under
3 27 subsection 1, an eligible business shall provide the
3 28 enterprise zone commission with all of the following:
3 29 a. The long-term strategic plan for the business which
3 30 shall include labor and infrastructure needs.
3 31 b. Information dealing with the benefits the business will
3 32 bring to the area.
3 33 c. Examples of why the business should be considered or
3 34 would be considered a good business enterprise.
3 35 d. The impact the business will have on other businesses
4 1 in competition with it.
4 2 e. An affidavit that it has not, within the last five
4 3 years, violated state or federal environmental and worker
4 4 safety statutes, rules, and regulations or if such violation
4 5 has occurred that there were mitigating circumstances or such
4 6 violations did not seriously affect public health or safety or
4 7 the environment.
4 8 3. If a business has received incentives or assistance
4 9 under section 15E.186 and fails to maintain the requirements
4 10 of subsection 1 to be an eligible business, the business is
4 11 subject to repayment of all or a portion of the incentives and
4 12 assistance that it has received. The city or county, as
4 13 applicable, shall have the authority to take action to recover
4 14 the value of taxes not collected as a result of the exemption
4 15 provided by the community to the business. The department of
4 16 revenue and finance shall have the authority to recover the
4 17 value of state taxes or incentives provided under section
4 18 15E.186. The value of state incentives provided under section
4 19 15E.186 includes applicable interest and penalties. The
4 20 department of economic development and the city and county, as
4 21 applicable, shall enter into agreement with the business
4 22 specifying the method for determining the amount of incentives
4 23 or assistance paid which will be repaid in the event of
4 24 failure to maintain the requirements of subsection 1. In
4 25 addition, a business that fails to maintain the requirements
4 26 of subsection 1 shall not receive incentives or assistance for
4 27 each year during which the business is not in compliance.
4 28 Sec. 4. NEW SECTION. 15E.184 DISTRESS CRITERIA.
4 29 1. An enterprise zone may be designated by a county which
4 30 meets at least two of the following criteria:
4 31 a. The county has an average weekly wage that ranks among
4 32 the bottom twenty-five counties in the state based on the 1995
4 33 annual average weekly wage for employees in private business.
4 34 b. The county has a family poverty rate that ranks among
4 35 the top twenty-five counties in the state based on the 1990
5 1 census.
5 2 c. The county has experienced a percentage population loss
5 3 that ranks among the top twenty-five counties in the state
5 4 between 1990 and 1995.
5 5 d. The county has a percentage of persons sixty-five years
5 6 of age or older that ranks among the top twenty-five counties
5 7 in the state based on the 1990 census.
5 8 2. An enterprise zone may be designated by a city which
5 9 meets at least two of the following criteria:
5 10 a. The area has a per capita income of nine thousand six
5 11 hundred dollars or less based on the 1990 census.
5 12 b. The area has a family poverty rate of twelve percent or
5 13 higher based on the 1990 census.
5 14 c. Ten percent or more of the housing units are vacant in
5 15 the area.
5 16 d. The valuations of each class of property in the
5 17 designated area is seventy-five percent or less of the
5 18 citywide average for that classification based upon the most
5 19 recent valuations for property tax purposes.
5 20 e. The area is a blighted area, as defined in section
5 21 403.17.
5 22 3. The department of economic development shall certify
5 23 eligible enterprise zones that meet the requirements of
5 24 subsection 1 upon request by the county or subsection 2 upon
5 25 request by the city, as applicable.
5 26 Sec. 5. NEW SECTION. 15E.185 ENTERPRISE ZONE COMMISSION.
5 27 1. A county in which an eligible enterprise zone is
5 28 certified shall establish an enterprise zone commission to
5 29 review applications from qualified businesses located within
5 30 or requesting to locate within an enterprise zone to receive
5 31 incentives or assistance as provided in section 15E.186. The
5 32 commission shall consist of nine members. Five of these
5 33 members shall consist of one representative of the board of
5 34 supervisors, one member with economic development expertise
5 35 chosen by the department of economic development, one
6 1 representative of the county zoning board, one member of the
6 2 local community college board of directors, and one
6 3 representative of the local workforce development center.
6 4 These five members shall select the remaining four members.
6 5 If the enterprise zone consists of an area meeting the
6 6 requirements for eligibility for an urban or rural enterprise
6 7 community under Title XIII of the federal Omnibus Budget
6 8 Reconciliation Act of 1993, one of the remaining four members
6 9 shall be a representative of that zone. However, if the
6 10 enterprise zone qualifies under the city criteria, one of the
6 11 four members shall be a representative of an international
6 12 labor organization and if an enterprise zone is located in any
6 13 city, a representative, chosen by the city council, of each
6 14 such city may be a member of the commission. A county shall
6 15 have only one enterprise zone commission.
6 16 2. The commission may adopt more stringent requirements,
6 17 including requirements related to compensation and benefits,
6 18 for a business to be eligible for incentives or assistance
6 19 than provided in section 15E.183. The commission may develop
6 20 as an additional requirement that preference in hiring be
6 21 given to individuals who live within the enterprise zone. The
6 22 commission shall work with the local workforce development
6 23 center to determine the labor availability in the area.
6 24 3. If the enterprise zone commission determines that a
6 25 business qualifies for inclusion in an enterprise zone and is
6 26 eligible to receive incentives or assistance as provided in
6 27 section 15E.186, the commission shall submit an application
6 28 for incentives or assistance to the department of economic
6 29 development. The department may approve, defer, or deny the
6 30 application.
6 31 4. In making its decision, the commission or department
6 32 shall consider the impact of the eligible business on other
6 33 businesses in competition with it and compare the compensation
6 34 package of businesses in competition with the business being
6 35 considered for incentives or assistance. The commission or
7 1 department shall make a good faith effort to identify existing
7 2 Iowa businesses within an industry in competition with the
7 3 business being considered for incentives or assistance. The
7 4 commission or department shall also make a good faith effort
7 5 to determine the probability that the proposed incentives or
7 6 assistance will displace employees of existing businesses. In
7 7 determining the impact on businesses in competition with the
7 8 business seeking incentives or assistance, jobs created as a
7 9 result of other jobs being displaced elsewhere in the state
7 10 shall not be considered direct jobs created.
7 11 However, if the commission or department finds that an
7 12 eligible business has a record of violations of the law,
7 13 including but not limited to environmental and worker safety
7 14 statutes, rules, and regulations, over a period of time that
7 15 tends to show a consistent pattern, the eligible business
7 16 shall not qualify for incentives or assistance under section
7 17 15E.186, unless the commission or department finds that the
7 18 violations did not seriously affect public health or safety or
7 19 the environment, or if it did that there were mitigating
7 20 circumstances. In making the findings and determinations
7 21 regarding violations, mitigating circumstances, and whether an
7 22 eligible business is eligible for incentives or assistance
7 23 under section 15E.186, the commission or department shall be
7 24 exempt from chapter 17A. If requested by the commission or
7 25 department, the business shall provide copies of materials
7 26 documenting the type of violation, any fees or penalties
7 27 assessed, court filings, final disposition of any findings and
7 28 any other information which would assist the commission or
7 29 department in assessing the nature of any violation.
7 30 5. A business that is approved to receive incentives or
7 31 assistance shall, for the length of its designation as an
7 32 enterprise zone business, certify annually to the county or
7 33 city, as applicable, and the department of economic
7 34 development its compliance with the requirements of section
7 35 15E.183.
8 1 Sec. 6. NEW SECTION. 15E.186 INCENTIVES – ASSISTANCE.
8 2 For purposes of determining the incentives or assistance
8 3 provided in this section, "eligible business" means a business
8 4 which has been approved to receive incentives and assistance
8 5 by the department of economic development pursuant to
8 6 application as provided in section 15E.185. The incentives
8 7 and assistance provided under this division for businesses
8 8 located in enterprise zones shall be for a period not to
8 9 exceed ten years and shall include all of the following:
8 10 1. New jobs credit from withholding, as provided in
8 11 section 15.331.
8 12 2. Sales, services, and use tax refund, as provided in
8 13 section 15.331A.
8 14 3. Investment tax credit, as provided in section 15.333.
8 15 4. Research activities credit, as provided in section
8 16 15.335.
8 17 5. The county or city for which an eligible enterprise
8 18 zone is certified may exempt from all property taxation all or
8 19 a portion of the value added to the property upon which an
8 20 eligible business locates or expands in an enterprise zone and
8 21 which is used in the operation of the eligible business. The
8 22 amount of value added for purposes of this subsection shall be
8 23 the amount of the increase in assessed valuation of the
8 24 property following the location or expansion of the business
8 25 in the enterprise zone. The exemption may be allowed for a
8 26 period not to exceed ten years beginning the year the eligible
8 27 business enters into an agreement with the county or city to
8 28 locate or expand operations in an enterprise zone.
8 29
8 30
8 31
8 32 RON J. CORBETT
8 33 Speaker of the House
8 34
8 35
9 1
9 2 MARY E. KRAMER
9 3 President of the Senate
9 4
9 5 I hereby certify that this bill originated in the House and
9 6 is known as House File 724, Seventy-seventh General Assembly.
9 7
9 8
9 9
9 10 ELIZABETH ISAACSON
9 11 Chief Clerk of the House
9 12 Approved , 1997
9 13
9 14
9 15
9 16 TERRY E. BRANSTAD
9 17 Governor
Text: HF00723 Text: HF00725 Text: HF00700 - HF00799 Text: HF Index Bills and Amendments: General Index Bill History: General Index
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