ECONOMIC DEVELOPMENT

SENATE FILE 459 - Iowa Agricultural Industry Finance Loans - Assignment
HOUSE FILE 329 - Targeted Economic Development Projects
HOUSE FILE 390 - Small Business Assistance Programs
HOUSE FILE 392 - Economic Growth - Strategic Planning
HOUSE FILE 394 - Community Attraction and Tourism Program - Regional Marketing
HOUSE FILE 397 - Community Block Grants - Administrative Expenses
HOUSE FILE 480 - Shelter Assistance Fund - Purposes
HOUSE FILE 576 - Enterprise Zone Program - Miscellaneous Changes
HOUSE FILE 612 - New Jobs and Income Program - Agricultural Land Ownership by Nonresident Aliens
HOUSE FILE 677 - New Capital Investment Program

RELATED LEGISLATION

SENATE FILE 155 - Substantive Code Corrections

SEE STATE GOVERNMENT. This Act contains statutory corrections that include changes relating to employee training and retraining programs, various economic development programs, Iowa Finance Authority housing assistance, the Iowa Pollution Control Works and Drinking Water Facilities Financing Program, competition by government with private enterprise, community empowerment board duties, and the Office of Renewable Fuels and Coproducts.

SENATE FILE 424 - Urban Renewal Indebtedness Reporting

SEE TAXATION. This Act requires each city and county that has established an urban renewal area to report, on or before April 1, 2003, the amount of loans, advances, indebtedness, or bonds which qualify for payment with tax increment financing revenues in the fiscal year beginning July 1, 2003.

SENATE FILE 433 - Appropriations - Economic Development

SEE APPROPRIATIONS. This Act makes appropriations and transfers from the General Fund of the State and other funds to the Iowa Department of Economic Development.

SENATE FILE 441 - Enterprise Zone and Property Rehabilitation Tax Credits - Certificates - Transfer

SEE TAXATION. This Act relates to the transfer of certain property-related tax credits, including a housing business tax credit under the Enterprise Zone Program.

HOUSE FILE 391 - Electric Power Generation Facilities - Cogeneration Pilot Program

SEE ENERGY & PUBLIC UTILITIES. This Act establishes a pilot program of two cogeneration projects within the Iowa Department of Economic Development to promote the development of cogeneration in Iowa. The program is scheduled for repeal July 1, 2007.

HOUSE FILE 472 - Federal Block Grant Appropriations

SEE APPROPRIATIONS. This Act appropriates federal block grant and other nonstate moneys to state agencies for the federal fiscal year beginning October 1, 2003, and ending September 30, 2004. The Act includes funding for various economic development programs, including the Community Development Block Grant.

HOUSE FILE 654 - Sales and Use Taxes - Sand Handling and Core and Mold Making Equipment

SEE TAXATION. This Act exempts core and mold making equipment and sand handling equipment used by a foundry in the mold making process from the sales and use taxes. The exemption applies retroactively to July 1, 1997. Refund claims are limited and paid over five fiscal years.

HOUSE FILE 681 - Cooperatives - Tax Credits and Credit Refunds

SEE AGRICULTURE. This Act eliminates a requirement that a cooperative must be engaged in ethanol production to be eligible to claim a special tax credit or refund available to an eligible business involved in the production of value-added agricultural products under the New Jobs and Income Program.

HOUSE FILE 682 - Wine Manufacturing, Sale, and Distribution

SEE ALCOHOL REGULATION & SUBSTANCE ABUSE. This Act is concerned with the funding of grape and wine development programs in the state, and with the establishment of new wine permit classifications and fees for native wines.

HOUSE FILE 683 - Miscellaneous Appropriations and Revisions, Sales and Use Tax Revisions, Criminal Code Revisions, and Other Changes

SEE APPROPRIATIONS. This Act makes appropriations from the Grow Iowa Values Fund and other sources to the Department of Economic Development, creates Workforce Training and Economic Development Funds for community colleges, creates a Loan and Credit Guarantee Fund, and creates an Endow Iowa Tax Credit.

HOUSE FILE 692 - Taxation, Economic Growth and Development, and Other Changes - Liability Reform, Workers' and Unemployment Compensation, and Financing Charges

SEE TAXATION. Divisions VI through XIV and XIX make changes relating to economic development by creating a Grow Iowa Values Board, amending provisions relating to the Value-Added Agricultural Products and Processes Financial Assistance Program, establishing Endow Iowa Grants, amending provisions relating to the commercialization of research issues, establishing a Loan and Credit Guarantee Fund, amending provisions relating to economic development assistance and data collection, establishing the Cultural Entertainment District Certification Program, establishing a University-Based Research Utilization Program, and amending provisions relating to site preparation for targeted economic development.

ECONOMIC DEVELOPMENT

SENATE FILE 459 - Iowa Agricultural Industry Finance Loans - Assignment (full text of bill)
BY COMMITTEE ON APPROPRIATIONS. This Act amends the Iowa Agricultural Industry Finance Act codified in Division XIX of Code Chapter 15E. An Iowa agricultural industry finance corporation is a private business which is recognized by the state to provide financing to eligible persons who are engaging in specific agricultural industrial ventures (an agricultural products processor or an agricultural biotechnology enterprise). In 1998, the General Assembly appropriated $25 million to the Iowa Department of Economic Development, subject to repayment, for purposes of awarding such a loan to one corporation in order to finance these ventures (see 1998 Iowa Acts, Chapter 1207). The corporation must repay the department $1 million (4 percent of the total amount of the loan) each year for 25 years. The moneys are to be deposited into the Road Use Tax Fund.

The Act authorizes the department to accept an assignment of a loan made by the corporation providing financing to an eligible person. The period of assignment may be for any number of years. The Act provides that under an assignment agreement, moneys paid by the eligible person to the department are in lieu of the amount of moneys required to be paid by the corporation to the department. The eligible person does not have to pay $1 million per year, but the total amount paid under the agreement must equal the amount that the department would have received from the corporation during that same period. The Act provides that the assignment agreement must contain conditions relating to the right of payment assigned to the department, which may include creditor rights. The Act provides that the department has no right of recourse against the corporation for amounts that are not collected under the loan assignment. The Act takes effect May 12, 2003.

HOUSE FILE 329 - Targeted Economic Development Projects (full text of bill)
BY COMMITTEE ON ECONOMIC GROWTH. This Act relates to site preparation for targeted economic development.

The Act provides that a city, county, or region formed by two or more counties, subject to the approval of the property owner, may designate an area within the boundaries of the city, county or region for a specific type of targeted economic development. The type of targeted economic development shall be manufacturing, light industrial, warehouse and distribution, office parks, business and commerce parks, or research and development.

The Act provides that a city, county or region that designates an area may apply to the Department of Economic Development for purposes of certifying the area as a preapproved development site.

The Act provides that, prior to a specific project being developed, a city, county or region designating the area may apply for and obtain appropriate licenses, permits and approvals for the type of targeted economic development project desired for the area.

HOUSE FILE 390 - Small Business Assistance Programs (full text of bill)
BY COMMITTEE ON ECONOMIC GROWTH. This Act relates to economic development programs for targeted small businesses.

The Act amends the Targeted Small Business Financial Assistance Program. The Act expands the eligible financial assistance recipients to include low income persons establishing or expanding small business ventures. The Act increases the amount of financial assistance that can be received as a loan, grant or guarantee under the program to $50,000. The Act requires the Department of Economic Development to maintain records of all financial assistance approved under the program and maintain information regarding the effectiveness of the financial assistance in establishing or expanding small business ventures.

The Act abolishes the Iowa Self Employment Loan Program and makes conforming amendments.

HOUSE FILE 392 - Economic Growth - Strategic Planning (full text of bill)
BY COMMITTEE ON ECONOMIC GROWTH. This Act relates to economic growth strategic planning.

The Act requires all state agencies to include economic growth in their mission statements. The Act requires the Iowa Economic Development Board to include performance measures and benchmarks in its three-year comprehensive strategic plan and in its evaluation of the attainment of goals and objectives from pursuing the policies of the three-year comprehensive plan for state economic growth prepared by the board. The method of evaluation must provide for a review of the organizational structure of the state's economic growth efforts.

HOUSE FILE 394 - Community Attraction and Tourism Program - Regional Marketing (full text of bill)
BY COMMITTEE ON ECONOMIC GROWTH. This Act relates to the Community Attraction and Tourism Program established by the Vision Iowa Board and administered by the Department of Economic Development, subject to the direction and approval of the board. The Act adds as a component of the department's administration of the program the assisting of communities in the regional marketing of multiple-purpose attraction and tourism facilities.

HOUSE FILE 397 - Community Block Grants - Administrative Expenses (full text of bill)
BY COMMITTEE ON ECONOMIC GROWTH. This Act relates to funds received from the federal government in the form of community development block grants that exceed the amount appropriated to the Department of Economic Development for the federal fiscal year beginning October 1, 2002.

The Act allows the department to expend up to 2 percent of eligible community development block grant income received for purposes of administration.

The Act takes affect April 24, 2003, and is retroactively applicable to July 1, 2002.

HOUSE FILE 480 - Shelter Assistance Fund - Purposes (full text of bill)
BY COMMITTEE ON ECONOMIC GROWTH. This Act relates to the Shelter Assistance Fund administered by the Department of Economic Development. The Act removes construction of group home shelters for the homeless and domestic violence shelters from the list of purposes for which the moneys in the fund may be used.

HOUSE FILE 576 - Enterprise Zone Program - Miscellaneous Changes (full text of bill)
BY COMMITTEE ON ECONOMIC GROWTH. This Act amends the Enterprise Zone Program administered by the Department of Economic Development.

In 2002, the Enterprise Zone Program was amended to change all references to the 1990 Certified Federal Census to the 2000 Certified Federal Census and allow counties and cities currently meeting the distress criteria based on the 1990 census to continue to designate enterprise zones until July 1, 2003. The Act changes the July 1, 2003, deadline to December 1, 2003, and makes conforming amendments to 2002 Iowa Acts, Chapter 1145, which take effect May 15, 2003.

Currently, the Enterprise Zone Program prohibits an enterprise zone from being decertified or amended. The Act provides that an enterprise zone designated by a city shall only be amended if the amendment consists of an area being added to the enterprise zone and the added area meets the distress criteria for cities. The Act provides that an enterprise zone designated by a county or city may be decertified; however, if a subsequent enterprise zone is designated, the expiration date of the subsequent enterprise zone shall be the same as the expiration date of the decertified enterprise zone. The Act allows a portion of a certified enterprise zone to be decertified, provided that the remaining portion of the certified enterprise zone meets the distress criteria. These provisions take effect May 15, 2003.

The Act adds reduction and payback provisions to the Enterprise Zone Program if a business that is approved to receive incentives or assistance or a business that has already received incentives or assistance experiences a layoff within the state or closes any of its facilities within the state. The Act allows the department to reduce or eliminate incentives and assistance if the business has not yet received incentives and assistance and to require repayment if incentives and assistance have already been received.

The Act amends the housing business portion of the Enterprise Zone Program by striking a requirement that single-family homes and dwelling units which are rehabilitated or constructed by the eligible housing business must be modest homes or units.

The Act amends the development business portion of the Enterprise Zone Program by allowing an eligible development business to be approved under the program prior to entering into an agreement with at least one business for purposes of locating the business in all or a portion of the building space for a period of at least five years. However, the Act requires the agreement to be entered into prior to the eligible development business receiving any assistance under the program.

In relation to development businesses under the Enterprise Zone Program, the Act changes the criteria a nonretail business must meet to locate in a building space. The Act changes a prohibition that the nonretail business not share common ownership or common management with the development business to provide that if a nonretail business locating in a building space occupies 90 percent or less of the building space, the nonretail business shall not share common ownership or common management with the development business.

HOUSE FILE 612 - New Jobs and Income Program - Agricultural Land Ownership by Nonresident Aliens (full text of bill)
BY COMMITTEE ON ECONOMIC GROWTH. This Act relates to the exemption from land ownership restrictions for nonresident aliens under the New Jobs and Income Program. Under the program, an eligible business receiving the exemption is allowed to receive one or more one-year extensions of the five-year time limit for developing agricultural land acquired for nonfarming purposes. The Act provides that, in addition to the unlimited one-year extensions of the five-year time limit, an eligible business may also receive one five-year extension of the time limit.

HOUSE FILE 677 - New Capital Investment Program (full text of bill)
BY COMMITTEE ON WAYS AND MEANS. This Act creates a New Capital Investment Program and amends the New Jobs and Income Program.

The Act provides that to be eligible to receive incentives under the New Capital Investment Program, a business is required to meet all of the following requirements:

1. The business has not closed or reduced its operation in one area of the state and relocated substantially the same operation in the community.
2. The business is not a retail business where entrance is limited by a cover charge or membership requirement.
3. The business makes a capital investment of at least $1 million.
4. The business creates high quality jobs due to the capital investment.
5. The start up, location or expansion of the business occurs within at least a period of three years.
6. The business provides the community and the Department of Economic Development with an affidavit stating that the business has not, within the five years prior to the application date, violated state or federal environmental or worker safety statutes, rules or regulations or, if such violation has occurred, that there were mitigating circumstances or such violations did not seriously affect public health or safety or the environment.

The Act also allows a community and the department to consider a variety of factors in determining the eligibility of a business to participate in the program. The factors include the impact of the proposed project on the community and the state; the impact the business will have on other businesses in competition with it; the potential for future growth in the industry represented by the business; the impact the proposed new capital investment will have on the ability of the business to expand, upgrade or modernize its capabilities, and the extent to which the new capital investment will result in a more productive and competitive business enterprise and workforce; and the local funding match to be provided.

The Act provides that, if the community determines that a business is eligible, the community shall approve by resolution the application for incentives. Once a business is found to be eligible, the community shall submit the application to the department and the department may approve, defer or deny the application.

The Act requires a business to enter into an agreement with the department specifying the requirements which must be met to confirm eligibility under the program. The agreement must contain, at a minimum, provisions relating to continued compliance, repayment of incentives due to a failure to comply, and the reduction, elimination or repayment of incentives for reasons related to layoffs or the closure of facilities.

The Act provides that for tax years beginning on or after January 1, 2003, an eligible business shall be eligible to receive some or all of a number of incentives: the sales, services, and use tax refund available under the New Jobs and Income Program and the research activities credit available under the New Jobs and Income Program. The Act also allows an eligible business to claim a tax credit equal to a percentage of the new investment that is directly related to new jobs created by the location or expansion of an eligible business under the program. The percentage ranges from 1 percent to 5 percent based on the number of high quality jobs that are created, as determined by the department. The tax credit is allowed against personal and corporate income tax and against the franchise tax for financial institutions. The tax credits may be carried forward for a period of seven years or until depleted, whichever occurs first. The Act provides that, subject to prior approval by the Department of Economic Development, in consultation with the Department of Revenue and Finance, an eligible business whose project primarily involves the production of value added agricultural products or uses biotechnology related processes may elect to receive a refund of all or a portion of an unused tax credit. The Act provides a certification method for claiming tax credit refunds. The tax credit refund certificates are not valid until the tax year following the completion date of the capital investment. The Act limits the Department of Economic Development to issuing tax credit refund certificates under this program and the New Jobs and Income Program to a total of not more than $4 million during a fiscal year.

The Act allows an eligible business to claim an insurance premium tax credit equal to a percentage of the new investment directly related to new jobs created by the location or expansion of an eligible business under the program. The percentage ranges from 1 percent to 5 percent based on the number of high quality jobs that are created, as determined by the department. The tax credits may be carried forward for a period of seven years or until depleted, whichever occurs first.

The Act provides that an eligible business may receive other applicable federal, state and local incentives and tax credits in addition to those provided under the New Capital Investment Program; however, an eligible business shall not receive funds, tax credits, or incentives under the Community Economic Betterment Program or the Enterprise Zone Program.

The Act eliminates the capital investment requirement waiver and provides examples of demonstrations of good cause for the job positions created waiver under the New Jobs and Income Program.