Senate File 110 - Introduced SENATE FILE BY WARNSTADT, COURTNEY, FRAISE, WIECK, and GRONSTAL Passed Senate, Date Passed House, Date Vote: Ayes Nays Vote: Ayes Nays Approved A BILL FOR 1 An Act relating to withholding agreements and local match 2 requirements of the targeted jobs withholding tax credit 3 program. 4 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 5 TLSB 1481XS 83 6 tw/sc:mg/8 PAG LIN 1 1 Section 1. Section 403.19A, subsection 3, paragraph c, 1 2 Code 2009, is amended to read as follows: 1 3 c.(1)The pilot project city shall enter into a 1 4 withholding agreement with each employer concerning the 1 5 targeted jobs withholding credit. The withholding agreement 1 6 shall provide for the total amount of withholding tax credits 1 7 awarded. An agreement shall not provide for an amount of 1 8 withholding credits that exceeds the amount of the qualifying 1 9 investment made in the project.However, anAn agreement 1 10 shall not be entered into by a pilot project city with a 1 11 business currently located in this state unless the business 1 12 either creates ten new jobs or makes a qualifying investment 1 13 of at least five hundred thousand dollars within the urban 1 14 renewal area. The withholding agreement may have a term of up 1 15 to ten years. An employer shall not be obligated to enter 1 16 into a withholding agreement. 1 17(2) The pilot project city shall not enter into a 1 18 withholding agreement after June 30, 2010.1 19 Sec. 2. Section 403.19A, subsection 3, paragraph j, Code 1 20 2009, is amended by striking the paragraph and inserting in 1 21 lieu thereof the following: 1 22 j. (1) A pilot project city entering into a withholding 1 23 agreement shall arrange for matching local financial support 1 24 for the project. The local match required under this 1 25 paragraph "j" shall be in an amount equal to one dollar for 1 26 every dollar of withholding credit received by the pilot 1 27 project city. 1 28 (2) For purposes of this paragraph "j", "local financial 1 29 support" means cash or in=kind contributions to the project 1 30 from a private donor, a business, or the pilot project city. 1 31 (3) If the project, when completed, will increase the 1 32 amount of property tax revenues collected by the pilot project 1 33 city by an amount equal to at least ten percent of the amount 1 34 of withholding credit dollars received by the pilot project 1 35 city, then the pilot project city shall itself contribute at 2 1 least ten percent of the local match amount computed under 2 2 subparagraph (1). 2 3 (4) If the project, when completed, will not increase the 2 4 amount of property tax revenues collected by an amount at 2 5 least equal to ten percent of the amount of withholding credit 2 6 dollars received by the pilot project city, then the pilot 2 7 project city shall not be required to make a contribution to 2 8 the local match. 2 9 (5) A pilot project city's contribution, if any, to the 2 10 local match may include the dollar value of any tax abatement 2 11 provided by the city to the business for new construction. 2 12 EXPLANATION 2 13 This bill relates to the targeted jobs withholding tax 2 14 credit program. 2 15 The bill provides that a withholding agreement shall 2 16 include the total amount of withholding tax credits awarded 2 17 and that the amount of credits shall not exceed the amount of 2 18 the qualifying investment made in the project. 2 19 Current law provides that a pilot project city shall not 2 20 enter into agreements after June 30, 2010. The bill 2 21 eliminates this provision. 2 22 The bill amends and clarifies the local match requirements 2 23 of the program. The bill provides that if the completed 2 24 project will increase the amount of property tax revenues 2 25 collected by the pilot project city by 10 percent or more of 2 26 the amount of withholding credit dollars received, then the 2 27 pilot project city must contribute at least 10 percent of the 2 28 local match requirement. However, if the completed project 2 29 will not increase the amount of property tax revenues 2 30 collected by an amount at least equal to 10 percent of the 2 31 amount of withholding credit dollars received by the city, 2 32 then the city is not required to make a contribution to the 2 33 local match. 2 34 The bill specifies that a pilot project city's 2 35 contribution, if any, to the local match may include the 3 1 dollar value of any tax abatement provided by the city to the 3 2 business for new construction. 3 3 LSB 1481XS 83 3 4 tw/sc:mg/8.1