Senate File 2310 - Introduced SENATE FILE BY WARNSTADT Passed Senate, Date Passed House, Date Vote: Ayes Nays Vote: Ayes Nays Approved A BILL FOR 1 An Act relating to targeted jobs withholding credit agreements 2 for certain pilot project cities located in border counties. 3 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 4 TLSB 5877XS 82 5 tw/sc/14 PAG LIN 1 1 Section 1. Section 403.19A, subsection 1, unnumbered 1 2 paragraph 1, Code Supplement 2007, is amended to read as 1 3 follows: 1 4 For purposes of thissectionsubchapter, unless the context 1 5 otherwise requires: 1 6 Sec. 2. Section 403.19A, subsection 1, paragraphs c and f, 1 7 Code Supplement 2007, are amended to read as follows: 1 8 c. "Employer" means a business creating targeted jobs in 1 9an urban renewal area ofa pilot project city pursuant to a 1 10 withholding agreement. 1 11 f. "Targeted job" means a job in a business which is or 1 12 will be located inan urban renewal area ofa pilot project 1 13 city that pays a wage at least equal to the countywide average 1 14 wage. "Targeted job" includes new jobs from Iowa business 1 15 expansions or retentions within the city limits of the pilot 1 16 project city and those jobs resulting from established 1 17 out=of=state businesses, as defined by the department of 1 18 economic development, moving to or expanding in Iowa. 1 19 Sec. 3. Section 403.19A, subsection 3, paragraphs a and b, 1 20 Code Supplement 2007, are amended to read as follows: 1 21 a. A pilot project city may provide by ordinance for the 1 22 depositinto a designated account in the special fund 1 23 described in section 403.19, subsection 2,of the targeted 1 24 jobs withholding credit described in thissectionsubchapter 1 25 into a fund established for that purpose. The targeted jobs 1 26 withholding credit shall be based upon the wages paid to 1 27 employees pursuant to a withholding agreement. 1 28 b. An amount equal to three percent of the gross wages 1 29 paid by an employer to each employee under a withholding 1 30 agreement shall be credited from the payment made by the 1 31 employer pursuant to section 422.16. If the amount of the 1 32 withholding by the employer is less than three percent of the 1 33 gross wages paid to the employees covered by the withholding 1 34 agreement, the employer shall receive a credit against other 1 35 withholding taxes due by the employer or may carry the credit 2 1 forward for up to ten years or until depleted, whichever is 2 2 the earlier. The employer shall remit the amount of the 2 3 credit quarterly, in the same manner as withholding payments 2 4 are reported to the department of revenue, to the pilot 2 5 project city to be allocated to and when collected paid intoa 2 6 designated account inthespecialfundfor the urban renewal 2 7 area in which the targeted jobs are locatedestablished in 2 8 paragraph "a". All amounts so deposited shall be used or 2 9 pledged by the pilot project city foran urban renewala 2 10 project related to the employer pursuant to the withholding 2 11 agreement. 2 12 Sec. 4. Section 403.19A, subsection 3, paragraph c, 2 13 subparagraph (1), Code Supplement 2007, is amended to read as 2 14 follows: 2 15 (1) The pilot project city shall enter into a withholding 2 16 agreement with each employer concerning the targeted jobs 2 17 withholding credit. However, an agreement shall not be 2 18 entered into by a pilot project city with a business currently 2 19 located in this state unless the business either creates ten 2 20 new jobs or makes a qualifying investment of at least five 2 21 hundred thousand dollarswithin the urban renewal areain the 2 22 pilot project city. The withholding agreement may have a term 2 23 of up to ten years. An employer shall not be obligated to 2 24 enter into a withholding agreement. 2 25 Sec. 5. Section 403.19A, subsection 3, paragraph j, Code 2 26 Supplement 2007, is amended to read as follows: 2 27 j. A pilot project city that enters into a withholding 2 28 agreement shall arrange for a match of at least one dollar for 2 29 each withholding credit dollar received by the city. The 2 30 local match may come from the pilot project city, a private 2 31 donor, or the business, or a combination of all three. The 2 32 local match may be in cash or in kind to be used for the 2 33 business project. If the business is located in an urban 2 34 renewal area, the pilot project city may use revenues from the 2 35 special fund created in section 403.19, subsection 2, if the 3 1 project related to the employer meets the definition of urban 3 2 renewal project in section 403.17, subsection 25. 3 3 Sec. 6. CODE EDITOR DIRECTIVE. The Code editor is 3 4 directed to transfer section 403.19A, as amended in this Act, 3 5 to become new section 403.25 and to correct any internal 3 6 references as necessary. 3 7 EXPLANATION 3 8 This bill relates to the withholding agreement tax credits 3 9 pilot program by providing that employers who have entered 3 10 into a withholding agreement no longer have to be located in 3 11 an urban renewal area. Instead they are only required to be 3 12 in a pilot project city. 3 13 The bill also provides that the amount of the withholding 3 14 credits is to be deposited in a fund of the city established 3 15 for that purpose rather than into the special fund created for 3 16 urban renewal purposes. 3 17 The bill provides that a pilot project city may use tax 3 18 increment financing funds from the special fund created in 3 19 Code section 403.19 as matching funds, provided the project 3 20 meets the definition of an urban renewal project. 3 21 The bill directs the Code editor to transfer Code section 3 22 403.19A, as amended in the bill, to new Code section 403.25. 3 23 LSB 5877XS 82 3 24 tw/sc/14