House File 2473 - Introduced HOUSE FILE 2473 BY COMMITTEE ON WAYS AND MEANS (SUCCESSOR TO HF 2418) (SUCCESSOR TO HSB 591) A BILL FOR An Act relating to economic development and the use of funds 1 by establishing programs and funds, affecting programs, tax 2 incentives, and project completion and other assistance 3 administered by the economic development authority, by 4 diverting withholding tax payments for such programs, 5 incentives, and assistance, by abolishing the film tax 6 credit program, by replacing references to the economic 7 development fund and financial assistance program, 8 and by providing spending authority, by providing for 9 properly related matters, and including effective date and 10 retroactive and other applicability provisions. 11 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 12 TLSB 5347HZ (5) 84 ad/sc

H.F. 2473 DIVISION I 1 HIGH QUALITY JOBS PROGRAM AND RELATED ASSISTANCE AND PROGRAMS 2 Section 1. Section 15.327, subsections 2, 5, 7, 8, 10, 12, 3 and 13, Code Supplement 2011, are amended to read as follows: 4 2. “Benefit” has the same meaning as defined in section 5 15G.101 means nonwage compensation provided to an employee . 6 Benefits typically include medical and dental insurance 7 plans, pension, retirement, and profit-sharing plans, child 8 care services, life insurance coverage, vision insurance 9 coverage, disability insurance coverage, and any other nonwage 10 compensation as determined by the board. 11 5. “Created job” has the same meaning as defined in section 12 15G.101 means a new, permanent, full-time equivalent position 13 added to a business’s payroll in excess of the business’s base 14 employment level . 15 7. “Fiscal impact ratio” has the same meaning as defined 16 in section 15G.101 means a ratio calculated by estimating the 17 amount of taxes to be received from a business by the state 18 and dividing the estimate by the estimated cost to the state 19 of providing certain project completion assistance and tax 20 incentives to the business, reflecting a ten-year period and 21 expressed in terms of current dollars . For purposes of the 22 program, “fiscal impact ratio” does not include taxes received 23 by political subdivisions. 24 8. “Maintenance period completion date” has the same meaning 25 as defined in section 15G.101 means the date on which the 26 maintenance period ends . 27 10. “Project completion date” has the same meaning as 28 defined in section 15G.101 means the date by which a recipient 29 of project completion assistance has agreed to meet all the 30 terms and obligations contained in an agreement with the 31 authority . 32 12. “Qualifying wage threshold” has the same meaning as 33 defined in section 15G.101 means the laborshed wage for an 34 eligible business . 35 -1- LSB 5347HZ (5) 84 ad/sc 1/ 38

H.F. 2473 13. “Retained job” has the same meaning as defined in 1 section 15G.101 means a full-time equivalent position, in 2 existence at the time an employer applies for financial 3 assistance which remains continuously filled and which is at 4 risk of elimination if the project for which the employer is 5 seeking assistance does not proceed . 6 Sec. 2. Section 15.327, Code Supplement 2011, is amended by 7 adding the following new subsections: 8 NEW SUBSECTION . 1A. “Base employment level” means the 9 number of full-time equivalent positions at a business, 10 as established by the authority and a business using the 11 business’s payroll records, as of the date a business applies 12 for incentives or project completion assistance under the 13 program. 14 NEW SUBSECTION . 2A. “Business engaged in disaster recovery” 15 means a business located in an area declared a disaster area 16 by a federal official, that has sustained substantial physical 17 damage, that has closed as the result of a natural disaster, 18 and that has a plan for reopening that includes employing a 19 substantial number of the employees the business employed 20 before the natural disaster occurred. 21 NEW SUBSECTION . 6A. “Financial assistance” means assistance 22 provided only from the funds, rights, and assets legally 23 available to the authority pursuant to this chapter and 24 includes but is not limited to assistance in the form of 25 grants, loans, forgivable loans, and royalty payments. 26 NEW SUBSECTION . 7A. “Full-time equivalent position” means 27 a non-part-time position for the number of hours or days per 28 week considered to be full-time work for the kind of service 29 or work performed for an employer. Typically, a full-time 30 equivalent position requires two thousand eighty hours of work 31 in a calendar year, including all paid holidays, vacations, 32 sick time, and other paid leave. 33 NEW SUBSECTION . 7B. “Fund” means a fund created pursuant 34 to section 15.335B. 35 -2- LSB 5347HZ (5) 84 ad/sc 2/ 38

H.F. 2473 NEW SUBSECTION . 7C. “Laborshed wage” means the wage level 1 represented by those wages within two standard deviations 2 from the mean wage within the laborshed area in which the 3 eligible business is located, as calculated by the authority, 4 by rule, using the most current covered wage and employment 5 data available from the department of workforce development for 6 the laborshed area. 7 NEW SUBSECTION . 7D. “Maintenance period” means the period 8 of time between the project completion date and the maintenance 9 period completion date. 10 NEW SUBSECTION . 9A. “Program support” means the services 11 necessary for the efficient administration of this part, 12 including the delivery of program services to eligible 13 businesses. “Program support” may include the administrative 14 costs of providing project assistance, conducting a statewide 15 laborshed study in coordination with the department of 16 workforce development, outreach to business and marketing of 17 programs, the procurement of technical assistance, and the 18 implementation of information technology. 19 NEW SUBSECTION . 9B. “Project completion assistance” means 20 financial assistance or technical assistance provided to 21 an eligible business in order to facilitate the start-up, 22 location, or expansion of the business in this state and 23 provided in an expedient manner to ensure the successful 24 completion of the start-up, location, or expansion project. 25 NEW SUBSECTION . 10A. “Project completion period” means the 26 period of time between the date financial assistance is awarded 27 and the project completion date. 28 Sec. 3. Section 15.329, subsection 1, unnumbered paragraph 29 1, Code Supplement 2011, is amended to read as follows: 30 To be eligible to receive incentives or assistance 31 under this part, a business shall meet all of the following 32 requirements: 33 Sec. 4. Section 15.329, subsection 1, paragraph b, Code 34 Supplement 2011, is amended to read as follows: 35 -3- LSB 5347HZ (5) 84 ad/sc 3/ 38

H.F. 2473 b. (1) The business has not closed or substantially 1 reduced operations in one area of this state and relocated 2 substantially the same operations in a community in another 3 area of this state shall not be solely relocating operations 4 from one area of the state while seeking state or local 5 incentives . A project that does not create new jobs or 6 involve a substantial amount of new capital investment shall 7 be presumed to be a relocation. In determining whether a 8 business is solely relocating operations for purposes of this 9 subparagraph, the authority shall consider a letter of support 10 for the move from the affected local community. 11 (2) The business shall not be in the process of reducing 12 operations in one community while simultaneously applying 13 for assistance under the program. For purposes of this 14 subparagraph, a reduction in operations within twelve months 15 before or after an application for assistance is submitted to 16 the authority shall be presumed to be a reduction in operations 17 while simultaneously applying for assistance under the program. 18 (3) This paragraph shall not be construed to prohibit 19 a business from expanding its operation in a community if 20 existing operations of a similar nature in this state are not 21 closed or substantially reduced. 22 Sec. 5. Section 15.329, subsection 1, paragraph c, 23 subparagraphs (1) and (2), Code Supplement 2011, are amended 24 to read as follows: 25 (1) If the business is creating jobs, the business shall 26 demonstrate that the jobs will pay at least one hundred percent 27 of the qualifying wage threshold at the start of the project 28 completion period, at least one hundred thirty twenty percent 29 of the qualifying wage threshold by the project completion 30 date, and at least one hundred thirty twenty percent of 31 the qualifying wage threshold until the maintenance period 32 completion date. 33 (2) If the business is retaining jobs, the business 34 shall demonstrate that the jobs retained will pay at least 35 -4- LSB 5347HZ (5) 84 ad/sc 4/ 38

H.F. 2473 one hundred thirty twenty percent of the qualifying wage 1 threshold throughout both the project completion period and the 2 maintenance period. 3 Sec. 6. Section 15.329, subsection 2, Code Supplement 2011, 4 is amended by striking the subsection. 5 Sec. 7. Section 15.330, Code Supplement 2011, is amended to 6 read as follows: 7 15.330 Agreement. 8 A business shall enter into an agreement with the authority 9 specifying the requirements that must be met to confirm 10 eligibility pursuant to this part. The authority shall 11 consult with the community during negotiations relating to the 12 agreement. The agreement shall contain, at a minimum, the 13 following provisions: 14 1. A business that is approved to receive incentives 15 or assistance under this part shall, for the length of the 16 agreement, certify annually to the authority the compliance of 17 the business with the requirements of the agreement. If the 18 business receives a local property tax exemption, the business 19 shall also certify annually to the community the compliance of 20 the business with the requirements of the agreement. 21 2. The repayment of incentives or financial assistance 22 by the business if the business does not meet any of the 23 requirements of this part or the resulting agreement. 24 3. If a business that is approved to receive incentives 25 or assistance under this part experiences a layoff within the 26 state or closes any of its facilities within the state, the 27 authority shall have the discretion to reduce or eliminate 28 some or all of the incentives or assistance . If a business 29 has received incentives or assistance under this part and 30 experiences a layoff within the state or closes any of its 31 facilities within the state, the business may be subject to 32 repayment of all or a portion of the incentives or financial 33 assistance that it has received. 34 4. A project completion date, a maintenance period 35 -5- LSB 5347HZ (5) 84 ad/sc 5/ 38

H.F. 2473 completion date, the number of jobs to be created or retained, 1 or certain other terms and obligations described in section 2 15G.112, subsection 1 , paragraph “d” , as the authority 3 deems necessary in order to make the requirements in project 4 agreements uniform. The authority, with the approval of 5 the board, may adopt rules as necessary for making such 6 requirements uniform. Such rules shall be in compliance with 7 the provisions of this part and with the provisions of chapter 8 15G . 9 5. The amount and type of project completion assistance to 10 be provided under section 15.335B. 11 6. The amount of matching funds to be received by a business 12 from a city or county. The authority shall adopt by rule a 13 formula for determining the amount of matching funds required 14 under the program. 15 7. The business shall not be relocating or reducing 16 operations as described in section 15.329, subsection 1, 17 paragraph “b” . 18 8. The proposed project shall not negatively impact other 19 businesses in competition with the business being considered 20 for assistance. The authority shall make a good-faith effort 21 to identify existing Iowa businesses within an industry in 22 competition with the business being considered for incentives 23 or assistance. The authority shall make a good-faith effort 24 to determine the probability that the proposed incentives or 25 assistance will displace employees of the existing businesses. 26 In determining the impact on businesses in competition with the 27 business being considered for incentives or assistance, jobs 28 created or retained as a result of other jobs being displaced 29 elsewhere in the state shall not be considered direct jobs 30 created or retained. 31 9. A report submitted to the authority with its application 32 describing all violations of environmental law or worker 33 safety law within the last five years. If, upon review of the 34 application, the authority finds that a business has a record 35 -6- LSB 5347HZ (5) 84 ad/sc 6/ 38

H.F. 2473 of violations of the law, statutes, rules, or regulations that 1 tends to show a consistent pattern, the authority shall not 2 provide incentives or assistance to the business unless the 3 authority finds either that the violations did not seriously 4 affect public health, public safety, or the environment, or, 5 if such violations did seriously affect public health, public 6 safety, or the environment, that mitigating circumstances were 7 present. 8 10. That the business shall only employ individuals legally 9 authorized to work in this state. In addition to any and 10 all other applicable penalties provided by current law, all 11 or a portion of the incentives or assistance received under 12 this part by a business that is found to knowingly employ 13 individuals not legally authorized to work in this state is 14 subject to recapture by the authority or by the department of 15 revenue. 16 11. Any terms deemed necessary by the authority to effect 17 compliance with the eligibility requirements of section 15.329. 18 Sec. 8. NEW SECTION . 15.330A Maintenance of agreements. 19 1. An eligible business receiving incentives or assistance 20 under this part shall meet all terms and obligations in an 21 agreement by the project completion date, but the board may 22 for good cause extend the project completion date or otherwise 23 amend an agreement. 24 2. During the maintenance period an eligible business 25 receiving incentives or assistance under this part shall 26 continue to comply with the terms and obligations of an 27 agreement entered into pursuant to section 15.330. 28 3. The authority may enforce the terms of an agreement as 29 necessary and appropriate. 30 Sec. 9. NEW SECTION . 15.331 Withholding tax payment 31 diversion. 32 1. If the authority enters into an agreement pursuant to 33 this part, or pursuant to chapter 15E, division XVIII, for 34 any of the incentives or assistance provided under this part, 35 -7- LSB 5347HZ (5) 84 ad/sc 7/ 38

H.F. 2473 the authority and the eligible business may agree to credit a 1 portion of the payments required under section 422.16 to the 2 authority as provided in this section. 3 2. a. An eligible business entering into a withholding 4 agreement with the authority pursuant to this section shall 5 remit the total amount of withholding payments due pursuant to 6 section 422.16 to the department of revenue. 7 b. The department of revenue shall, beginning July 1 of each 8 fiscal year, quarterly deposit in a fund created pursuant to 9 section 15.106A an amount equal to two and one-half percent of 10 the gross wages paid by the eligible business to each employee 11 holding a created or retained job covered by an agreement 12 entered into pursuant to this part or chapter 15E, division 13 XVIII, until such deposits reach ten million dollars or until 14 June 30 of the fiscal year, whichever comes first. Moneys to 15 be deposited pursuant to this paragraph shall not be paid to 16 the authority until the correct amounts have been verified by 17 the department of revenue. 18 3. Withholding payments shall be deposited pursuant to this 19 section by the department of revenue for each employee holding 20 a created or retained job for the duration of the agreement 21 between the eligible business and the authority. 22 4. The authority and the eligible business shall provide 23 to the department of revenue any information necessary to 24 correctly process the diversion of withholding tax payments 25 pursuant to this section. 26 5. An employee holding a created or retained job shall 27 receive full credit for the amount withheld as provided in 28 section 422.16. 29 6. If a portion of the employee’s gross wages are subject 30 to a withholding credit diversion under chapter 260E, chapter 31 260G, or section 403.19A, or a supplemental withholding credit 32 diversion under sections 15A.7 and 15E.197, when a withholding 33 credit diversion under this section is agreed to, then the 34 withholding payments shall be credited in the following order 35 -8- LSB 5347HZ (5) 84 ad/sc 8/ 38

H.F. 2473 of priority: 1 a. First, the withholding payments to be credited pursuant 2 to chapters 260E and 260G and sections 15A.7 and 15E.197. 3 b. Second, the withholding payments to be credited pursuant 4 to this section until the deposits reach the amount specified 5 in subsection 2. 6 c. Third, the withholding payments to be credited pursuant 7 to section 403.19A. 8 7. The authority, in conjunction with the department of 9 revenue, shall adopt rules for the implementation of this 10 section. 11 Sec. 10. Section 15.335A, subsection 1, unnumbered 12 paragraph 1, Code Supplement 2011, is amended to read as 13 follows: 14 Tax incentives are available to eligible businesses as 15 provided in this section . The incentives are based upon the 16 number of jobs created or retained that pay at least one 17 hundred thirty twenty percent of the qualifying wage threshold 18 as computed pursuant to section 15G.112, subsection 4 , and 19 the amount of the qualifying investment made according to the 20 following schedule: 21 Sec. 11. Section 15.335A, subsection 2, paragraphs b, c, 22 f, and g, Code Supplement 2011, are amended by striking the 23 paragraphs. 24 Sec. 12. Section 15.335A, subsections 3 and 4, Code 25 Supplement 2011, are amended by striking the subsections. 26 Sec. 13. Section 15.335A, subsection 5, Code Supplement 27 2011, is amended to read as follows: 28 5. The authority shall negotiate the amount of tax 29 incentives provided to an applicant under the program 30 in accordance with this section and section 15G.112 , as 31 applicable . 32 Sec. 14. NEW SECTION . 15.335B Assistance for certain 33 programs and projects. 34 1. a. Under the authority provided in section 15.106A, 35 -9- LSB 5347HZ (5) 84 ad/sc 9/ 38

H.F. 2473 there shall be established one or more funds within the state 1 treasury, under the control of the authority, to be used for 2 purposes of this section. 3 b. A fund established for purposes of this section shall 4 consist of the moneys deposited by the department of revenue 5 pursuant to section 15.331, any moneys appropriated to the 6 authority for purposes of this section, or moneys otherwise 7 accruing to the authority and deposited in the fund for 8 purposes of this section. 9 c. Interest or earnings on moneys in a fund used for the 10 purposes of this section, and all repayments or recaptures of 11 the assistance provided under this section, shall accrue to 12 the authority and shall be used for purposes of this section, 13 notwithstanding section 12C.7. Moneys in a fund are not 14 subject to section 8.33. 15 2. a. The moneys in a fund established for purposes of 16 this section, as described in subsection 1, shall be allocated 17 by the authority in appropriate amounts to be used for the 18 following purposes: 19 (1) For providing project completion assistance to eligible 20 businesses under this part and for program support of such 21 assistance. 22 (2) For providing economic development region financial 23 assistance under section 15E.232, subsections 1, 3, 4, 5, and 24 6. 25 (3) For providing financial assistance for business 26 accelerators pursuant to section 15E.351. 27 (4) For deposit in the innovation and commercialization 28 fund created pursuant to section 15.412. 29 (5) For providing financial assistance to businesses 30 engaged in disaster recovery. 31 (6) For deposit in the entrepreneur investment awards 32 program fund pursuant to section 15E.363. 33 b. Each fiscal year, the authority shall estimate the 34 amount of revenues available for purposes of this section and 35 -10- LSB 5347HZ (5) 84 ad/sc 10/ 38

H.F. 2473 shall develop a budget appropriate for the expenditure of the 1 revenues available. 2 3. In providing assistance under this section, the 3 authority shall make a determination as to the amount and 4 type of assistance that is most appropriate for facilitating 5 the successful completion of an eligible business’s project. 6 Before making such a determination, the authority shall do all 7 of the following: 8 a. Consider a business’s eligibility for the tax incentives 9 available under section 15.335A and ensure that the amount of 10 assistance to be provided appropriately complements the amount 11 and type of tax incentives to be provided. 12 b. Consider the amount of private sector investment to be 13 leveraged by the project, including the eligible business’s 14 equity investment, debt financing, and any venture capital or 15 foreign investment available, and make a good-faith effort to 16 provide only the amount of incentives and assistance necessary 17 to facilitate the project’s successful completion. 18 c. Consider the amount and type of the local community 19 match. The authority may provide assistance to an early-stage 20 business in a high-growth industry regardless of the amount of 21 local match involved. 22 d. Calculate the fiscal impact ratio of the project and use 23 it to guide the provision of incentives and assistance under 24 this part. 25 e. Evaluate the quality of the project based on the factors 26 described in section 15.329, subsection 5, and any other 27 relevant factors. 28 f. Ensure that the combined amount of incentives and 29 assistance are appropriate to the size of the project, to 30 the value of the project, to the fiscal impact ratio of the 31 project, and to any other relevant factors. 32 4. Each eligible business receiving assistance under this 33 section shall enter into an agreement with the authority and 34 the agreement shall meet the requirements of sections 15.330 35 -11- LSB 5347HZ (5) 84 ad/sc 11/ 38

H.F. 2473 and 15.330A. 1 Sec. 15. NEW SECTION . 15.335C Economically distressed 2 areas. 3 1. a. Notwithstanding section 15.329, subsection 1, 4 paragraph “c” , the authority may provide tax incentives or 5 project completion assistance under this part to an eligible 6 business paying less than one hundred twenty percent of the 7 qualifying wage threshold if that business is located in an 8 economically distressed area. 9 b. A business in an economically distressed area receiving 10 incentives or assistance pursuant to this section shall be 11 required to pay at least one hundred percent of the qualifying 12 wage threshold. 13 2. For purposes of this section, “economically distressed 14 area” means a county that ranks among the bottom twenty-five of 15 all Iowa counties, as measured by one of the following: 16 a. Average monthly unemployment level for the most recent 17 twelve-month period. 18 b. Average annualized unemployment level for the most recent 19 five-year period. 20 Sec. 16. Section 15A.7, subsection 3, Code Supplement 2011, 21 is amended to read as follows: 22 3. That the employer shall agree to pay wages for the jobs 23 for which the credit is taken of at least the county wage or 24 the regional laborshed wage, as calculated by the authority 25 pursuant to section 15G.112 15.327 , subsection 3 , whichever 26 is lower 7C . Eligibility for the supplemental credit shall 27 be based on a one-time determination of starting wages by the 28 community college. 29 Sec. 17. Section 15E.193, subsection 1, paragraph b, 30 subparagraph (1), Code Supplement 2011, is amended to read as 31 follows: 32 (1) The business shall provide a sufficient package of 33 benefits to each employee holding a created or retained job. 34 For purposes of this paragraph, “created job” and “retained job” 35 -12- LSB 5347HZ (5) 84 ad/sc 12/ 38

H.F. 2473 have the same meaning as defined in section 15G.101 15.327 . 1 Sec. 18. Section 15E.193, subsection 1, paragraphs c and d, 2 Code Supplement 2011, are amended to read as follows: 3 c. The business shall pay a wage that is at least ninety 4 percent of the qualifying wage threshold. For purposes of this 5 paragraph, “qualifying wage threshold” has the same meaning as 6 defined in section 15G.101 15.327 . 7 d. Creates or retains at least ten full-time equivalent 8 positions and maintains them until the maintenance period 9 completion date. For purposes of this paragraph, “maintenance 10 period completion date” and “full-time equivalent position” have 11 the same meanings as defined in section 15G.101 15.327 . 12 Sec. 19. Section 15E.231, unnumbered paragraph 1, Code 13 Supplement 2011, is amended to read as follows: 14 In order for an economic development region to receive 15 moneys under the economic development financial assistance 16 program established in section 15G.112 assistance pursuant to 17 section 15.335B , an economic development region’s regional 18 development plan must be approved by the authority. An 19 economic development region shall consist of not less than 20 three counties, unless two contiguous counties have a combined 21 population of at least three hundred thousand based on the 22 most recent federal decennial census. An economic development 23 region shall establish a focused economic development effort 24 that shall include a regional development plan relating to one 25 or more of the following areas: 26 Sec. 20. Section 15E.232, subsections 1, 3, 4, 5, and 6, 27 Code Supplement 2011, are amended to read as follows: 28 1. An economic development region may apply for financial 29 assistance from the economic development a fund established 30 pursuant to section 15.335B to assist with the installation 31 of physical infrastructure needs including, but not limited 32 to, horizontal infrastructure, water and sewer infrastructure, 33 and telecommunications infrastructure, related to the 34 development of fully served business and industrial sites by 35 -13- LSB 5347HZ (5) 84 ad/sc 13/ 38

H.F. 2473 one or more of the region’s economic development partners 1 or for the installation of infrastructure related to a 2 new business location or expansion. In order to receive 3 financial assistance pursuant to this subsection , the economic 4 development region must demonstrate all of the following: 5 a. The ability to provide matching moneys on a basis of a 6 one dollar contribution of local matching moneys for every two 7 dollars received from the economic development fund. 8 b. The commitment of the specific business partner 9 including, but not limited to, a letter of intent defining a 10 capital commitment or a percentage of equity. 11 c. That all other funding alternatives have been exhausted. 12 3. An economic development region may apply for financial 13 assistance from the economic development a fund established 14 pursuant to section 15.335B to assist an existing business 15 threatened with closure due to a potential consolidation to an 16 out-of-state location. The economic development region may 17 apply for financial assistance from the economic development 18 fund for the purchase, rehabilitation, or marketing of a 19 building that has become available due to the closing of an 20 existing business due to a consolidation to an out-of-state 21 location. In order to receive financial assistance under this 22 subsection , an economic development region must demonstrate the 23 ability to provide local matching moneys on a basis of a one 24 dollar contribution of local moneys for every three dollars 25 received from the economic development fund. 26 4. An economic development region may apply for financial 27 assistance from the economic development a fund established 28 pursuant to section 15.335B to establish and operate an 29 entrepreneurial initiative. In order to receive financial 30 assistance under this subsection , an economic development 31 region must demonstrate the ability to provide local matching 32 moneys on a basis of a one dollar contribution of local moneys 33 for every two dollars received from the economic development 34 fund. 35 -14- LSB 5347HZ (5) 84 ad/sc 14/ 38

H.F. 2473 5. a. An economic development region may apply for 1 financial assistance from the economic development a fund 2 established pursuant to section 15.335B to establish and 3 operate a business succession assistance program for the 4 region. 5 b. In order to receive financial assistance under this 6 subsection , an economic development region must demonstrate 7 the ability to provide local matching moneys on a basis of a 8 one dollar contribution of local moneys for every two dollars 9 received from the economic development fund. 10 6. An economic development region may apply for financial 11 assistance from the economic development a fund established 12 pursuant to section 15.335B to implement economic development 13 initiatives that are either unique to the region or innovative 14 in design and implementation. In order to receive financial 15 assistance under this subsection , an economic development 16 region must demonstrate the ability to provide local matching 17 moneys on a one-to-one basis. 18 Sec. 21. Section 15E.351, subsection 1, Code Supplement 19 2011, is amended to read as follows: 20 1. The economic development authority shall establish and 21 administer a business accelerator program to provide financial 22 assistance for the establishment and operation of a business 23 accelerator for technology-based, value-added agricultural, 24 information solutions, alternative and renewable energy 25 including the alternative and renewable energy sectors listed 26 in section 476.42, subsection 1 , paragraph “a” , subparagraph 27 (1), or advanced manufacturing start-up businesses or for a 28 satellite of an existing business accelerator. The program 29 shall be designed to foster the accelerated growth of new 30 and existing businesses through the provision of technical 31 assistance. The economic development authority may provide 32 financial assistance under this section from moneys allocated 33 for regional financial assistance for business accelerators 34 pursuant to section 15G.111 section 15.335B , subsection 9 2 . 35 -15- LSB 5347HZ (5) 84 ad/sc 15/ 38

H.F. 2473 Sec. 22. NEW SECTION . 15E.362 Entrepreneur investment 1 awards program. 2 1. The authority shall establish and administer an 3 entrepreneur investment awards program for purposes of 4 providing grants to programs that provide technical and 5 financial assistance to entrepreneurs seeking to create, 6 locate, or expand a business in the state if the business 7 derives or intends to derive more than ten percent of its gross 8 sales from markets outside of the state. Financial assistance 9 under the program shall be provided from the entrepreneur 10 investment awards program fund created in section 15E.363. 11 2. In determining whether an entrepreneur assistance 12 program qualifies for a grant under the entrepreneur investment 13 awards program, the authority shall find that the entrepreneur 14 assistance program demonstrates all of the following: 15 a. The entrepreneur assistance program expended at least 16 five hundred thousand dollars in the program’s previous 17 fiscal year to provide technical and financial assistance to 18 entrepreneurs seeking to create, locate, or expand a business 19 in the state if the business derives or intends to derive more 20 than ten percent of its gross sales from markets outside of the 21 state. The five hundred thousand dollars in expenditures in 22 the program’s previous fiscal year shall not include grants 23 awarded pursuant to this section or any funds invested in 24 clients’ businesses. 25 b. The entrepreneur assistance program provides services to 26 meet the broad-based needs of entrepreneurs seeking to create, 27 locate, or expand a business in the state if the business 28 derives or intends to derive more than ten percent of its gross 29 sales from markets outside of the state. 30 c. The entrepreneur assistance program communicates with 31 and cooperates with other entrepreneur assistance programs and 32 similar service providers in the state. 33 d. The entrepreneur assistance program engages various 34 funding sources for entrepreneurs seeking to create, locate, 35 -16- LSB 5347HZ (5) 84 ad/sc 16/ 38

H.F. 2473 or expand a business in the state if the business derives or 1 intends to derive more than ten percent of its gross sales from 2 markets outside of the state. 3 e. The entrepreneur assistance program communicates with 4 and cooperates with various entities for purposes of locating 5 suitable facilities for clients of the entrepreneur assistance 6 program. 7 f. The entrepreneur assistance program is an Iowa-based 8 business. 9 3. In determining whether an entrepreneur assistance 10 program qualifies for a grant under the entrepreneur investment 11 awards program, the authority may consider any of the 12 following: 13 a. The business experience of the professional staff 14 employed or retained by the entrepreneur assistance program. 15 b. The business plan review capacity of the entrepreneur 16 assistance program’s professional staff. 17 c. The expertise of the entrepreneur assistance program’s 18 professional staff in all aspects of business disciplines. 19 d. The entrepreneur assistance program’s professional 20 staff’s access to external service providers including legal, 21 accounting, marketing, and financial services. 22 4. Upon being awarded a grant under this section, the 23 entrepreneur assistance program shall accept client referrals 24 from the economic development authority. 25 5. The amount of a grant awarded to a qualifying 26 entrepreneur assistance program shall not exceed the lesser of 27 the following for any fiscal year: 28 a. An amount equal to twenty-five percent of the funds 29 expended by the qualifying program in the program’s previous 30 fiscal year to provide technical and financial assistance to 31 entrepreneurs seeking to create, locate, or expand a business 32 in the state if the business derives or intends to derive more 33 than ten percent of its gross sales from markets outside of 34 the state. For purposes of this paragraph, “funds expended” 35 -17- LSB 5347HZ (5) 84 ad/sc 17/ 38

H.F. 2473 shall not include grants awarded pursuant to this section or 1 any funds invested in clients’ businesses. 2 b. An amount equal to one hundred percent of funds raised by 3 the entrepreneur assistance program in the previous fiscal year 4 from private foundations, federal or local government funds, 5 financial institutions, or individuals. 6 c. Two hundred thousand dollars. 7 6. The grant awarded to a qualifying entrepreneur 8 assistance program shall only be used for the purpose of the 9 operating costs incurred by the program. 10 7. The economic development authority board may approve, 11 deny, or defer each application for a grant from the 12 entrepreneur investment awards program fund created in section 13 15E.363. 14 8. The maximum amount of the total grants awarded by the 15 authority for the entrepreneur investment awards program shall 16 not exceed one million dollars in a fiscal year. The authority 17 shall award the grants on a first-come, first-served basis. 18 9. The authority may contract with outside service 19 providers for assistance with the grant program described in 20 this section or may delegate the administration of the program 21 to the Iowa innovation corporation pursuant to section 15.106B. 22 Sec. 23. NEW SECTION . 15E.363 Entrepreneur investment 23 awards program fund. 24 1. An entrepreneur investment awards program fund is 25 created in the state treasury under the control of the 26 authority and consisting of any moneys appropriated by the 27 general assembly and any other moneys available to and obtained 28 or accepted by the authority for placement in the fund. 29 2. Payments of interest, repayments of moneys provided, and 30 recaptures of moneys provided shall be deposited in the fund. 31 3. The fund shall be used to provide grants under the 32 entrepreneur investment awards program established in section 33 15E.362. 34 4. Moneys in the fund are not subject to section 8.33. 35 -18- LSB 5347HZ (5) 84 ad/sc 18/ 38

H.F. 2473 Notwithstanding section 12C.7, interest or earnings on moneys 1 in the fund shall be credited to the fund. 2 Sec. 24. Section 159A.6B, subsection 2, Code Supplement 3 2011, is amended to read as follows: 4 2. The office may execute contracts in order to provide 5 technical support and outreach services for purposes of 6 assisting and educating interested persons as provided in this 7 section . The office may also contract with a consultant to 8 provide part or all of these services. The office may require 9 that a person receiving assistance pursuant to this section 10 contribute up to fifty percent of the amount required to 11 support the costs of contracting with the consultant to provide 12 assistance to the person. The office shall assist the person 13 in completing any technical information required in order 14 to receive assistance by the economic development authority 15 pursuant to the value-added agriculture component of the 16 economic development financial assistance program established 17 pursuant to section 15G.112 section 15.335B . 18 Sec. 25. Section 266.19, Code Supplement 2011, is amended 19 to read as follows: 20 266.19 Renewable fuel —— assistance. 21 The university shall cooperate in assisting renewable fuel 22 production facilities supporting livestock operations managed 23 by persons receiving assistance pursuant to the value-added 24 agriculture component of the economic development financial 25 assistance program established in section 15G.112 section 26 15.335B . 27 Sec. 26. Section 455B.104, subsection 2, Code Supplement 28 2011, is amended to read as follows: 29 2. The department shall assist persons applying for 30 assistance to establish and operate renewable fuel production 31 facilities pursuant to the value-added agriculture component 32 of the economic development financial assistance program 33 established in section 15G.112 section 15.335B . 34 Sec. 27. REPEAL. Section 455B.433, Code Supplement 2011, 35 -19- LSB 5347HZ (5) 84 ad/sc 19/ 38