House File 2770 - Introduced HOUSE FILE BY COMMITTEE ON WAYS AND MEANS (SUCCESSOR TO HF 2736) (SUCCESSOR TO HF 2497) Passed House, Date Passed Senate, Date Vote: Ayes Nays Vote: Ayes Nays Approved A BILL FOR 1 An Act relating to economic development by creating a bioscience 2 funding board and bioscience fund, providing tax incentives 3 under the high quality job creation Act, and providing an 4 exempt activity for foreign corporations, and including 5 effective and retroactive applicability date provisions. 6 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 7 TLSB 5331HZ 81 8 tm/cf/24 PAG LIN 1 1 Section 1. NEW SECTION. 15E.361 BIOSCIENCE FUNDING BOARD 1 2 == BIOSCIENCE FUND. 1 3 1. A bioscience funding board is established for purposes 1 4 of funding bioscience=related projects. The board shall award 1 5 financial assistance from moneys available in the bioscience 1 6 fund created in subsection 4. Financial assistance shall not 1 7 be used to pay the salary of a salaried employee, but may be 1 8 used to pay the salary of a contract employee provided the 1 9 employment contract is for not more than five years. 1 10 Financial assistance may only be used to partially fund an 1 11 endowed chair position if significant private contributions 1 12 and contributions from foreign governments are used to fund 1 13 the position. Not more than twenty=five percent of the cost 1 14 of funding an endowed chair position shall be paid with 1 15 financial assistance awarded from the bioscience fund. Not 1 16 more than twenty=five percent of all moneys deposited into the 1 17 bioscience fund may be used for financial assistance to fund 1 18 endowed chair positions. 1 19 2. The board shall consist of the following members: 1 20 a. Three members of the state board of regents appointed 1 21 by the governor and confirmed by the senate pursuant to 1 22 section 2.32. 1 23 b. Three members of a single bioscience development 1 24 organization identified by the department pursuant to section 1 25 15G.111, subsection 2, appointed by the governor and confirmed 1 26 by the senate pursuant to section 2.32. 1 27 c. Three members appointed by the Iowa economic 1 28 development board and confirmed by the senate pursuant to 1 29 section 2.32. 1 30 d. One member selected by the members of the board who 1 31 shall serve as the president of the board. 1 32 3. The terms of the appointed members shall be staggered 1 33 as determined by the governor. A vacancy shall be filled by 1 34 the appointing authority. Members shall serve three=year 1 35 terms and may be reappointed. 2 1 4. A bioscience fund is created in the state treasury 2 2 under the control of the board and consisting of any moneys 2 3 appropriated by the general assembly and any other moneys 2 4 available to and obtained or accepted by the board for 2 5 placement in the fund. Payments of interest, repayments of 2 6 moneys loaned pursuant to this section, and recaptures of 2 7 loans shall be deposited in the fund. The fund shall be used 2 8 to provide grants, loans, forgivable loans, loan guarantees, 2 9 and other forms of assistance pursuant to subsection 1. 2 10 Moneys in the fund are not subject to section 8.33. 2 11 Notwithstanding section 12C.7, interest or earnings on moneys 2 12 in the fund shall be credited to the fund. The board shall 2 13 ensure that the fund is an ongoing, self=sustaining fund. 2 14 As a condition of the receipt of moneys from the fund, the 2 15 department shall require recipients to enter into agreements 2 16 specifying compliance reporting requirements. If a recipient 2 17 of moneys from the fund fails to comply with a reporting 2 18 requirement or does not meet other compliance requirements in 2 19 an agreement, the recipient is subject to repayment of all or 2 20 a portion of the moneys received. An agreement between the 2 21 department and a recipient shall specify the method for 2 22 determining the amount of moneys which will be repaid in the 2 23 event of failure to comply with the requirements of an 2 24 agreement. 2 25 Sec. 2. Section 15.335A, Code Supplement 2005, is amended 2 26 by adding the following new subsection: 2 27 NEW SUBSECTION. 7. a. In calculating the annual wage, 2 28 including benefits, pursuant to subsection 1, the department 2 29 shall not require a certain wage level, without benefits, to 2 30 be met. 2 31 b. In calculating the value of benefits pursuant to 2 32 subsection 1, if an employer offers medical insurance under 2 33 both single and family coverage plans, the employer shall be 2 34 given credit for providing medical insurance under family 2 35 coverage plans to fifty percent of the number of new high= 3 1 quality jobs employees. 3 2 Sec. 3. Section 15G.112, subsection 1, Code Supplement 3 3 2005, is amended to read as follows: 3 4 1. In order to receive financial assistance from the 3 5 department from moneys appropriated from the grow Iowa values 3 6 fund, the average annual wage, including benefits, of new jobs 3 7 created must be equal to or greater than one hundred thirty 3 8 percent of the average county wage. The department shall not 3 9 require any other wage level to be met. For purposes of this 3 10 section, "average county wage" and "benefits" mean the same as 3 11 defined in section 15I.1. 3 12 Sec. 4. Section 15I.1, subsection 2, paragraph a, Code 3 13 Supplement 2005, is amended to read as follows: 3 14 a. Medical and dental insurance plans. If an employer 3 15 offers medical insurance under both single and family coverage 3 16 plans, the employer shall be given credit for providing 3 17 medical insurance under family coverage plans to the greater 3 18 of fifty percent of the new employees or the actual percentage 3 19 of new employees. 3 20 Sec. 5. Section 422.34A, Code 2005, is amended by adding 3 21 the following new subsection: 3 22 NEW SUBSECTION. 8. Utilizing a distribution facility 3 23 within this state, owning or leasing property at a 3 24 distribution facility within this state that is used at or 3 25 distributed from the distribution facility, or selling 3 26 property shipped or distributed from a distribution facility. 3 27 For purposes of this subsection, "distribution facility" means 3 28 an establishment where shipments of tangible personal property 3 29 are processed for delivery to customers. "Distribution 3 30 facility" does not include an establishment where retail sales 3 31 of tangible personal property or returns of such property are 3 32 undertaken with respect to retail customers on more than 3 33 twelve days a year except for a distribution facility which 3 34 processes customer sales orders by mail, telephone, or 3 35 electronic means, if the distribution facility also processes 4 1 shipments of tangible personal property to customers and if at 4 2 least seventy=five percent of the dollar amount of goods sold 4 3 through the distribution facility are sold to customers 4 4 outside this state. 4 5 Sec. 6. EFFECTIVE AND RETROACTIVE APPLICABILITY DATE. 4 6 1. Section 2 of this Act, being deemed of immediate 4 7 importance, takes effect upon enactment and applies 4 8 retroactively to June 9, 2005. 4 9 2. Section 5 of this Act, being deemed of immediate 4 10 importance, takes effect upon enactment and applies 4 11 retroactively to January 1, 2006, for tax years beginning on 4 12 or after that date. 4 13 EXPLANATION 4 14 This bill relates to economic development by creating a 4 15 bioscience funding board and bioscience fund, providing tax 4 16 incentives under the high quality job creation Act, and 4 17 providing an income tax exempt activity for foreign 4 18 corporations. 4 19 The bill establishes a bioscience funding board for 4 20 purposes of funding bioscience=related projects. The bill 4 21 creates a bioscience fund in the state treasury under the 4 22 control of the board and consisting of any moneys appropriated 4 23 by the general assembly and any other moneys available to and 4 24 obtained or accepted by the board for placement in the fund. 4 25 The bill provides that, as a condition of the receipt of 4 26 moneys from the fund, the department shall require recipients 4 27 to enter into agreements specifying compliance reporting 4 28 requirements and repayment terms for noncompliance. The bill 4 29 provides that the board shall award financial assistance from 4 30 moneys in the bioscience fund. The bill prohibits the use of 4 31 financial assistance for paying the salary of a salaried 4 32 employee, but allows the use of paying the salary of certain 4 33 contract employees. The bill allows financial assistance to 4 34 be used to partially fund an endowed chair position only if 4 35 significant private contributions and contributions from 5 1 foreign governments are used to fund the position. The bill 5 2 provides that not more than 25 percent of the cost of funding 5 3 an endowed chair position shall be paid with financial 5 4 assistance awarded from the bioscience fund and not more than 5 5 25 percent of all moneys deposited into the fund may be used 5 6 for financial assistance to fund endowed chair positions. 5 7 In determining eligibility for tax incentives under the 5 8 high quality job creation Act, a calculation of the annual 5 9 wage, including benefits, of new high=quality jobs created 5 10 must be performed. The bill provides that, in making the 5 11 calculation, the department shall not require a certain wage 5 12 level, without benefits, to be met. The bill provides that, 5 13 in making a calculation of the value of benefits, if an 5 14 employer offers medical insurance under both single and family 5 15 coverage plans, the employer shall be given credit for 5 16 providing medical insurance under family coverage plans to 50 5 17 percent of the number of new high=quality jobs employees. 5 18 This provision of the bill takes effect upon enactment and 5 19 applies retroactively to June 9, 2005. 5 20 Currently, in order to receive financial assistance from 5 21 the department of economic development from moneys 5 22 appropriated from the grow Iowa values fund, the average 5 23 annual wage, including benefits, of new jobs created must be 5 24 equal to or greater than 130 percent of the average county 5 25 wage. The bill prohibits the department from requiring any 5 26 other wage level to be met. 5 27 Currently, under the wage=benefits tax credit program, the 5 28 term "benefits" is defined to include certain benefits, one of 5 29 which is medical and dental insurance plans. The bill 5 30 provides that if an employer offers medical insurance under 5 31 both single and family coverage plans, the employer shall be 5 32 given credit for providing medical insurance under family 5 33 coverage plans to the greater of 50 percent of the new 5 34 employees or the actual percentage of new employees. 5 35 The bill provides that a foreign corporation shall not be 6 1 considered doing business in this state or deriving income 6 2 from sources within this state for the purposes of corporate 6 3 income tax liability by utilizing a distribution facility 6 4 within this state, owning or leasing property at a 6 5 distribution facility within this state that is used at or 6 6 distributed from the distribution facility, or selling 6 7 property shipped or distributed from a distribution facility. 6 8 This provision of the bill takes effect upon enactment and 6 9 applies retroactively to January 1, 2006. 6 10 LSB 5331HZ 81 6 11 tm:rj/cf/24