1997 SUMMARY OF LEGISLATION

ECONOMIC DEVELOPMENT

ECONOMIC DEVELOPMENT LEGISLATION

SENATE FILE 205 - Waivers and Exemptions Under New Jobs and Income Program (full text of act)

BY COMMITTEE ON SMALL BUSINESS, ECONOMIC DEVELOPMENT AND TOURISM. This Act relates to continued eligibility under the New Jobs and Income Program by amending provisions concerning the ownership of land by nonresident aliens and the waiver of certain capital investment and job creation requirements.
Code Section 15.331B provides an exemption from the land ownership restriction for nonresident aliens. The Act extends the availability of this exemption from July 1, 1998, to July 1, 2002. Code Section 15.337 relates to the waiver of qualification requirements for the New Jobs and Income Program, including the capital investment requirement and the requirement for number of positions created. This Act repeals the provision in Code Section 15.337 which states that the Department of Economic Development cannot grant such waivers after June 30, 1998.

SENATE FILE 272 - Implementation of Economic Development Assistance Programs (full text of act)

BY COMMITTEE ON SMALL BUSINESS, ECONOMIC DEVELOPMENT AND TOURISM. This Act relates to financial assistance provided by the Department of Economic Development. The department has the responsibility of providing financial assistance to local development corporations for financing construction of buildings to attract business and industry. The Act provides that financial assistance to these corporations is subject to the availability of funds in the Building Loan Fund.
The department is also responsible for assisting in the development, promotion, implementation, and administration of a statewide network of regional corporations designed to increase the availability of financing for small businesses. The Act provides that such assistance is subject to the availability of funds in the Small Business Economic Development Corporation Fund.

HOUSE FILE 367 - Job Training Withholding Payments (full text of act)

BY COMMITTEE ON ECONOMIC DEVELOPMENT. This Act provides that when an individual business completes its repayment obligation for a new jobs training project funded under Code Chapter 260E, the community college sponsoring the project shall report to the Department of Economic Development the amount of withholding paid by the business to the community college during the final 12 months of withholding payments. As provided in the Code, an agreement between a community college and a business to establish a training program may provide for program costs to be paid, in whole or in part, by new jobs credit from withholding, which is based on the wages paid to the employees in the new jobs.
The Act provides that community colleges shall identify all businesses that were part of a multiple issue certificate under Code Chapter 260E and which have met their repayment obligation for a training project under that certificate between July 1, 1996, and May 1, 1997. The Act provides for a one-time appropriation to provide a credit from the General Fund of the State to the Workforce Development Fund Account for the amount of diversion that would have been made to the account had this Act been effective beginning July 1, 1996.
The Act takes effect May 1, 1997, and applies retroactively to July 1, 1996, to include any final 12 months of withholding payments beginning on or after that date.

HOUSE FILE 368 - Entrepreneurial Ventures Assistance Program (full text of act)

BY COMMITTEE ON ECONOMIC DEVELOPMENT. This Act requires the Department of Economic Development to establish an Entrepreneurial Ventures Assistance Program to provide financial and technical assistance to early-stage industry companies and entrepreneurs.
An eligible applicant is an individual who is participating in or has successfully completed a recognized entrepreneurial venture development curriculum, or a business whose principal participants have successfully completed a recognized entrepreneurial venture development curriculum. Applications for assistance must include a business plan, a marketing plan, a budget, and a statement of purpose. Technical assistance shall not exceed $5,000 per project. In addition to the technical assistance, financial assistance shall not exceed $20,000 per project. In addition to appropriated funds, the department may allocate resources from the Iowa Strategic Investment Fund for the administration and operation of the program. Administrative rules shall be adopted to administer the program.

HOUSE FILE 722 - Seed and Venture Capital — Capital Investment Board — Tax Credits (full text of act)

BY COMMITTEE ON WAYS AND MEANS. This Act establishes the Iowa Capital Investment Board, provides for tax credits, terminates the Iowa Seed Capital Corporation, and establishes the Iowa Capital Transition Board.
The Act establishes the Iowa Capital Investment Board to do all of the following:

• Facilitate public and private investment in a series of state, regional or national seed and venture capital funds willing to invest in Iowa seed and venture capital opportunities.
• Facilitate the creation of a small business investment company.
• Coordinate with other existing publicly created or supported seed and venture investment funds.
• Report annually to the Governor and the General Assembly on investments, anticipated value of investments and tax credits given, and estimated current and anticipated impact such investments have, or are anticipated to have, on the state.
• Conduct an annual risk analysis comparing valuations of investments and tax credits given.

The Act provides for tax credits to be allowed for net losses incurred by an investor in the Iowa Capital Investment Board. Tax credits shall only be redeemed for the amount of principal invested and only based on losses at the time of the termination or insolvency of the Iowa Capital Investment Board. The Act limits the aggregate amount of tax credits issued to $30 million. The Act allows the tax credits to be carried forward for three years. A tax credit is not refundable but is transferable.
The Act provides for the termination and winding up of affairs of the Iowa Seed Capital Corporation. All assets and liabilities of the Iowa Seed Capital Corporation that cannot be transferred to the Iowa Capital Investment Board shall be liquidated or settled, with all remaining moneys transferring to the General Fund of the State.
The Act establishes the Iowa Capital Transition Board to coordinate the transition from the state's present seed and venture capital activity to the Iowa Capital Investment Board by advising and consulting the appropriate departments, boards or corporations regarding the development of tax credits, the transfer of assets and liabilities from the Iowa Seed Capital Corporation, the coordination of existing Department of Economic Development Financial Assistance Programs, and carrying out the Iowa Capital Investment Board's duties. The Act provides that the Iowa Capital Transition Board shall be terminated July 1, 1998.
The Act provides that the Department of Economic Development shall provide staff assistance, physical facilities and other support necessary to the Iowa Capital Investment Board and the Iowa Capital Transition Board.
The Act takes effect May 14, 1997.

HOUSE FILE 724 - Enterprise Zones (full text of act)

BY COMMITTEE ON WAYS AND MEANS. This Act authorizes a county to designate up to 1 percent of its total area as an enterprise zone for a period of 10 years. A city with a population of 24,000 or more, based upon the 1990 census, may designate more than one or more contiguous census tracts or other geographical areas approved for that purpose by the Department of Economic Development as enterprise zones. However, the total amount of land that may be in these city and county zones cannot exceed in the aggregate 1 percent of the total area of the county and the department must approve any such designation. If an area meets the requirement to be an urban or rural enterprise community under the federal Omnibus Budget Reconciliation Act of 1993, the area is automatically designated an enterprise zone, but is not counted for purpose of the 1 percent of the total area of the county limitation.
In order for an area to be designated an enterprise zone, at least two of the criteria specified must be met. In the case of county-designated areas, the area must be in a county having an average weekly wage that ranks among the bottom 25 counties based upon 1995 statistics; family poverty rate that ranks among the top 25 counties based upon the 1990 census; percentage population loss that ranks among the top 25 counties between 1990 and 1995; or a percentage of persons 65 years old that ranks among the top 25 counties. In the case of city-designated areas, the area must be in a city having per capita income of $9,600 or less, poverty rate of 12 percent or more, and 10 percent or more of housing units are vacant, all according to the 1990 census; the valuations in the area equal 75 percent or less of the average for the city; or the area is a blighted area as defined under the urban renewal law.
A business that is or will be located in the enterprise zone shall receive incentives or assistance if the business meets all of certain eligibility criteria. These criteria include paying at least 80 percent of the cost of standard medical and dental insurance, paying at least 90 percent of the lesser of the average county wage or average regional wage with a minimum wage of $7.50 per hour, creating at least 10 new jobs, and making a capital investment of at least $500,000. However, in a county with a population of 10,000 or less, a business may be allowed to create only five initial jobs if the remaining five jobs will be added within five years. The $500,000 capital investment requirement may be reduced by up to $250,000 of the value of any vacant building that a business will be occupying or, in the case of an existing business in the zone, reduced by up to $250,000 of the value of the building and land that is or has been occupied for at least five years. Retail businesses are not eligible nor are businesses that move similar operations from another part of the state to the enterprise zone. The county or city may establish more stringent criteria.
The incentives and assistance that shall be provided are a 1.5 percent credit from withholding of income tax from wages of new employees for training new employees to work in the zone, a refund of sales and use taxes for utility services furnished in the zone and for materials used in construction contracts fulfilled in the zone, an investment tax credit for investments made in the zone, credit for increasing research activities in the state, and an exemption from all property taxation on the value added to the property used in the business in the zone if the county or city so decides.
If a business receiving incentives and assistance fails to maintain the eligibility criteria, it shall not receive incentives and assistance during that year and subsequent years during which it is in noncompliance. In addition, the business may be subject to payment of any property taxes made exempt and recovery of state tax incentives provided. The Department of Economic Development and the city or county, as applicable, will enter into an agreement with the business specifying the method for determining the amount of incentives or assistance paid that will be repaid.

HOUSE FILE 732 - Housing Development (full text of act)

BY COMMITTEE ON APPROPRIATIONS. This Act adds housing development to the primary responsibilities of the Department of Economic Development. The department is required to provide housing needs assessments, provide a one-stop source for housing development assistance in coordination with other state agencies, and establish programs to assist communities in developing housing to meet a range of community needs.
The Act establishes the Local Housing Assistance Program in the department. The purpose of the program is to provide financial and technical assistance to cities, counties, local housing entities, or local economic development organizations to meet housing development needs arising from economic development efforts. Financial assistance under the program is to be awarded on a competitive basis to cities, counties, housing trust funds, other local housing organizations, or local economic development organizations. To be eligible to receive assistance, the community in which a project will be undertaken must have had a housing needs assessment completed within the five years prior to the application for assistance. The Act sets forth criteria the department is required to use in reviewing applications for financial assistance. The Local Housing Assistance Program Fund is created to provide funding for the program. Moneys in the fund do not revert at the close of each fiscal year and the fund is subject to an annual audit by the Auditor of State.
The Act provides that interest on moneys in the Title Guarantee Fund of the Iowa Finance Authority and in real estate brokers common trust accounts shall be transferred to the department for the Local Housing Assistance Program.
The Act authorizes cities and counties to provide a property tax exemption for the first $75,000 of value of improvements added to residential property in an area designated by the city or county as appropriate for public improvements related to housing and residential development, or construction of housing and residential development, including single or multifamily housing.
The Act provides that a municipality with a population of 5,000 or less need not provide low or moderate income family housing assistance as part of a housing project funded through tax increment financing if the municipality has done a housing needs assessment that shows no low or moderate income housing need and the department agrees with the assessment.
The Act appropriates $1 million each fiscal year for the period beginning July 1, 1997, and ending June 30, 2002, from the Rebuild Iowa Infrastructure Fund for deposit in the Local Housing Assistance Program Fund.
The Governor vetoed provisions providing that a city or county which has adopted its own thermal efficiency energy conservation standards is not required to follow the state's standards regarding privately owned new construction of buildings with less than 100,000 cubic feet of enclosed space that requires heating or cooling.

RELATED LEGISLATION

SENATE FILE 240 -- Federal Block Grant Appropriations

(Complete summary under APPROPRIATIONS)

This Act appropriates federal block grant and other nonstate moneys to various state agencies for the federal fiscal year beginning October 1, 1997, and ending September 30, 1998, and for the state fiscal year beginning July 1, 1997, and ending June 30, 1998. The Act includes more than $30 million in funding for community development programs administered by the Department of Economic Development.

SENATE FILE 361 -- School-to-Work Programs — Workers' Compensation

(Complete summary under LABOR & EMPLOYMENT)

This Act authorizes school corporations to establish and maintain school-to-work programs including alternative learning opportunities through which students may obtain skills or training outside the classroom, and establishes that for purposes of the workers' compensation law, a student participating in a school-to-work program is defined as an "employee."

SENATE FILE 528 -- Land Recycling and Environmental Remediation Standards

(Complete summary under ENVIRONMENTAL PROTECTION)

This Act relates to the cleanup and reuse of contaminated property, environmental remediation standards and review procedures, participation in the remediation of contaminated property, liability for the voluntary cleanup of contaminated property, liability protections, and the establishment of a Land Recycling Program and a Land Recycling Fund.

SENATE FILE 542 -- Supplemental and Other Appropriations and Miscellaneous Provisions

(Complete summary under APPROPRIATIONS)

This Act makes supplemental appropriations for FY 1996-1997 and appropriations for other fiscal years. The Act includes provisions expressing legislative support for a value-added agricultural production initiative and authorizing the Department of Economic Development to enter into negotiations regarding innovative approaches.

HOUSE FILE 613 -- Linked Deposit Investment Programs

(Complete summary under BUSINESS, BANKING & INSURANCE)

This Act makes changes to the Linked Investment Programs in the Office of the Treasurer of State and requires the Department of Economic Development to develop a proposal for "instant buy down" assistance to targeted small businesses.

HOUSE FILE 655 -- Appropriations — Economic Development

(Complete summary under APPROPRIATIONS)

This Act makes appropriations and transfers from the General Fund of the State and other funds to the Department of Economic Development, Iowa State University, the University of Iowa, the University of Northern Iowa, the Department of Workforce Development, and the Public Employment Relations Board. The Act creates the Shelter Assistance Fund, authorizes the funding of high technology apprenticeship programs, amends the use of Physical Infrastructure Assistance Program appropriations, provides for the transfer of unobligated funds and physical assets of the Wallace Technology Transfer Foundation Fund, requests an interim study on housing, and requires future budget proposals to be submitted in certain formats.

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Last update: Thur July 24, 1997
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