S.F. 2139 Section 1. NEW SECTION . 15E.185 Rural opportunity zones. 1 1. The economic development authority shall designate a 2 county of this state as a rural opportunity zone if it meets 3 the eligibility criteria in section 15E.186. A county shall 4 remain designated as a rural opportunity zone until it loses 5 its designation from the authority. A county may lose its 6 designation as a rural opportunity zone if events subsequent 7 to its designation cause it to lose eligibility because it 8 no longer meets the criteria specified in section 15E.186. 9 However, a county shall not lose its designation as a rural 10 opportunity zone during its participation in the student loan 11 repayment program under section 15E.188. 12 2. A county may apply to the authority for designation as a 13 rural opportunity zone. The application shall be made by the 14 county board of supervisors in the form and manner prescribed 15 by the authority. The authority shall consider each county for 16 designation as a rural opportunity zone, even if the county 17 does not submit an application. 18 3. The authority shall review the eligibility of each county 19 in this state as a rural opportunity zone at least annually. 20 Sec. 2. NEW SECTION . 15E.186 Rural opportunity zone 21 eligibility criteria. 22 A county may be designated by the authority as a rural 23 opportunity zone if it meets at least two of the following 24 criteria: 25 1. The county has an average weekly wage that ranks among 26 the bottom twenty-five counties in the state based on the 2010 27 annual average weekly wage for employees in private business. 28 2. The county has a per capita income of twelve thousand six 29 hundred forty-eight dollars or less based on the 2010 certified 30 federal census. 31 3. The county has a family poverty rate of twelve percent or 32 higher based on the 2010 certified federal census. 33 4. The county has a family poverty rate that ranks among 34 the top twenty-five counties in the state based on the 2010 35 -1- LSB 5419XS (7) 84 mm/sc 1/ 10

S.F. 2139 certified federal census. 1 5. The county has experienced a percentage population 2 loss that ranks among the top twenty-five counties in the 3 state between 2005 and 2010. For purposes of this subsection, 4 prison population shall be excluded in the population loss 5 calculations. 6 6. The county has a percentage of persons sixty-five years 7 of age or older that ranks among the top twenty-five counties 8 in the state based on the 2010 certified federal census. 9 7. Ten percent or more of the housing units are vacant in 10 the county. 11 8. The valuations of each class of property in the county 12 is seventy-five percent or less of the statewide average for 13 that classification based upon the most recent valuations for 14 property tax purposes. 15 9. A recent business closure or permanent layoff has 16 occurred in the county. The business closure or permanent 17 layoff must involve the loss of full-time employees, not 18 including retail employees, at one place of business totaling 19 at least one thousand employees or four percent or more of 20 the county’s resident labor force based on the most recent 21 annual resident labor force statistics from the department of 22 workforce development, whichever is lower. A permanent layoff 23 does not include a layoff of seasonal employees or a layoff 24 that is seasonal in nature. For purposes of this paragraph, 25 “permanent layoff” means the loss of jobs to an out-of-state 26 location, the cessation of one or more production lines, the 27 removal of manufacturing machinery and equipment, or similar 28 actions determined to be equivalent in nature by the authority. 29 For purposes of this subsection, a permanent layoff must occur 30 on or after the effective date of this Act. 31 Sec. 3. NEW SECTION . 15E.187 Student loan repayment program 32 fund. 33 A student loan repayment program fund is created in 34 the state treasury under the authority of the economic 35 -2- LSB 5419XS (7) 84 mm/sc 2/ 10

S.F. 2139 development authority. The fund shall consist of all moneys 1 appropriated to it by the general assembly. The moneys in the 2 fund are not subject to the provisions of section 8.33 and 3 shall not be transferred, used, obligated, appropriated, or 4 otherwise encumbered except as provided in section 15E.188. 5 Notwithstanding section 12C.7, subsection 2, earnings or 6 interest on moneys appropriated pursuant to this section shall 7 be retained by the fund and used for the purposes designated 8 until expended. 9 Sec. 4. NEW SECTION . 15E.188 Student loan repayment 10 program. 11 1. For purposes of this section, unless the context 12 otherwise requires: 13 a. “Outstanding student loan debt” means the student loan 14 debt balance of a participating individual at the time of 15 enrollment in the program, which debt was incurred by the 16 participating individual for attendance at an institution of 17 higher education where such participating individual earned an 18 associate, bachelor, or postgraduate degree. For purposes of 19 this paragraph, “institution of higher education” means the same 20 as defined in section 12D.1. 21 b. “Participating county” means a county which has created a 22 county component in the program pursuant to subsection 4. 23 c. “Participating individual” means an individual that has 24 enrolled in the program pursuant to subsection 5. 25 d. “Program” means the student loan repayment program 26 established pursuant to this section, which program includes 27 both a county component and a matching component. 28 e. “Qualifying individual” means an individual that meets 29 the eligibility requirements in subsection 3, paragraph “a” , 30 for participation in the program. 31 2. There is established a student loan repayment program 32 within the economic development authority. The program shall 33 consist of a county component for each participating county and 34 a matching component of the economic development authority for 35 -3- LSB 5419XS (7) 84 mm/sc 3/ 10

S.F. 2139 the purpose of providing student loan repayment assistance on 1 the outstanding student loan debt of participating individuals. 2 3. A county designated as a rural opportunity zone pursuant 3 to sections 15E.185 and 15E.186 may participate in the program 4 if it creates and implements a county component. A county 5 component shall contain the uniform terms and conditions 6 prescribed by the authority, and shall meet the following 7 minimum qualifications: 8 a. The county component shall only apply to resident 9 individuals that have outstanding student loan debt and that 10 establish domicile in the applicable county on or after the 11 county adopts a resolution creating a county component pursuant 12 to subsection 4, and prior to July 1, 2017. 13 b. The county component shall provide that participating 14 individuals are entitled to full participation in the county 15 component for five years, provided the participating individual 16 remains domiciled within that county for the entire five-year 17 period. Any participating individual that establishes domicile 18 outside of the county for which the individual first qualified 19 shall become ineligible to continue participation in the 20 program. 21 c. The county, through its county component, shall agree 22 to repay, subject to the availability of matching payments by 23 the economic development authority in subsection 6, over a 24 five-year period, the lesser of ten percent of the outstanding 25 student loan debt of the participating individual or seven 26 thousand five hundred dollars of the outstanding student 27 loan debt of the participating individual. A participating 28 individual must remain domiciled in the applicable county for 29 an entire calendar year to receive repayment assistance for 30 that year. 31 4. A county which creates and implements a county component 32 must provide to the authority a duly adopted resolution from 33 its board of supervisors on or before January 1, 2013. The 34 resolution shall be irrevocable and shall obligate the county 35 -4- LSB 5419XS (7) 84 mm/sc 4/ 10

S.F. 2139 to participate in the program for a period of five years for 1 each participating individual. 2 5. A qualifying individual shall enroll in both the county 3 component and the matching component of this program in the 4 form and manner prescribed by the authority. 5 6. a. The authority shall, subject to the availability 6 of moneys in the student loan repayment program fund, match 7 repayments made by a participating county under its county 8 component for each participating individual up to the maximum 9 amount specified in subsection 3, paragraph “c” . 10 b. Annual repayments of outstanding student loan debt 11 by a participating county under its county component of the 12 program, and matching repayments by the economic development 13 authority under the matching component of the program shall 14 be made following the close of a calendar year and following 15 the participating individual’s certification by the authority 16 and the applicable county that the participating individual 17 is entitled to repayment assistance pursuant to the program. 18 Repayments will be made directly to the lender of the 19 participating individual’s outstanding student loan debt. 20 c. The maximum aggregate amount that any participating 21 individual may receive from the county component and matching 22 component of this program shall not exceed the lesser of 23 twenty percent of the outstanding student loan debt of the 24 participating individual or fifteen thousand dollars of the 25 outstanding student loan debt of the participating individual. 26 d. Repayment assistance from the authority under the 27 matching component of this program is subject to the 28 availability of moneys in the student loan repayment program 29 fund. Nothing in this section guarantees a participating 30 individual a right to receive benefits provided in this 31 section. A county may provide repayment assistance under its 32 county component even if insufficient funds exist for the 33 economic development authority to provide matching funds under 34 the matching component. 35 -5- LSB 5419XS (7) 84 mm/sc 5/ 10

S.F. 2139 7. The authority shall adopt rules under chapter 17A 1 relating to the administration of this section. 2 Sec. 5. NEW SECTION . 15E.189 Future repeal. 3 This division is repealed on June 30, 2023. 4 Sec. 6. NEW SECTION . 422.11I Rural opportunity zone tax 5 credit. 6 1. As used in this section, unless the context otherwise 7 requires, “rural opportunity zone” means any county designated 8 by the economic development authority as a rural opportunity 9 zone pursuant to sections 15E.185 and 15E.186. 10 2. The taxes imposed under this division, less the credits 11 allowed under section 422.12, shall be reduced by a rural 12 opportunity zone tax credit. To be eligible for the credit, 13 the taxpayer must meet all of the following requirements: 14 a. The taxpayer must be a resident individual who was 15 domiciled in a rural opportunity zone in this state during 16 the entire tax year. A taxpayer domiciled in a county that 17 has lost its designation as a rural opportunity zone shall be 18 considered to be domiciled in a rural opportunity zone, so long 19 as the taxpayer established domicile in that county while the 20 county was designated as a rural opportunity zone. 21 b. The taxpayer established domicile in a rural opportunity 22 zone on or after July 1, 2012, and prior to January 1, 2017. 23 c. The taxpayer was domiciled outside of this state for five 24 or more years immediately prior to establishing domicile in a 25 rural opportunity zone. 26 d. The taxpayer had Iowa source net income of less than 27 ten thousand dollars in any one year for each of the five 28 years immediately prior to establishing domicile in a rural 29 opportunity zone. 30 e. The taxpayer’s tax return on which the credit is claimed 31 is timely filed, including any extension of time to file. 32 f. The taxpayer is not currently delinquent in filing 33 any tax return with this state nor does the taxpayer have 34 delinquent accounts, charges, fees, loans, taxes, or other 35 -6- LSB 5419XS (7) 84 mm/sc 6/ 10

S.F. 2139 indebtedness owed to this state or a political subdivision of 1 this state. 2 3. a. The credit shall be an amount equal to the taxpayer’s 3 income tax payable to this state under this division, computed 4 without regard to the credit allowed under this section, 5 the credit for withheld tax allowed under section 422.16, 6 subsection 9, and the credit for estimated tax paid under 7 section 422.16, subsection 11, paragraph “d” . 8 b. The maximum amount that may be refunded to a taxpayer 9 in any tax year the credit allowed under this section is 10 claimed shall not exceed the sum of the amount withheld from 11 the taxpayer’s wages or other income pursuant to section 12 422.16, subsection 1, for the tax year, plus the amount paid 13 as estimated tax by the taxpayer pursuant to section 422.16, 14 subsection 11, for the tax year. 15 c. A taxpayer may claim the credit allowed under this 16 section for not more than five consecutive tax years following 17 establishment of the taxpayer’s domicile in a rural opportunity 18 zone pursuant to subsection 2, paragraph “b” . 19 4. This section is repealed on June 30, 2022. 20 Sec. 7. APPLICABILITY. The following provision or 21 provisions of this Act apply to tax years beginning on or after 22 January 1, 2013, and ending on or before December 31, 2021: 23 1. The section of this Act enacting section 422.11I. 24 EXPLANATION 25 This bill relates to economic development by creating rural 26 opportunity zones within this state, a student loan repayment 27 program and fund, and an individual income tax credit. 28 The bill provides that the economic development authority 29 shall designate counties of this state as rural opportunity 30 zones if they meet certain criteria. A county may apply to 31 the authority for designation as a rural opportunity zone, but 32 application is not required for designation by the authority. 33 Once designated as a rural opportunity zone, a county may be 34 undesignated by the authority if events subsequent to its 35 -7- LSB 5419XS (7) 84 mm/sc 7/ 10

S.F. 2139 designation cause it to no longer be eligible. However, a 1 county shall not lose its designation as a rural opportunity 2 zone during its participation in the student loan repayment 3 program described in the bill. The authority is required to 4 review the eligibility of each county in this state as a rural 5 opportunity zone at least annually. 6 A county is eligible to be designated as a rural opportunity 7 zone if it meets at least two of nine criteria specified in 8 the bill relating to per capita income, average weekly wages, 9 family poverty rate, population loss, aging population, housing 10 vacancies, property valuations, or recent business closures or 11 permanent layoffs. 12 Rural opportunity zone designations are repealed on June 30, 13 2023. 14 The bill creates a student loan repayment program within the 15 economic development authority for the purpose of providing 16 student loan repayment assistance on the outstanding student 17 loan debt of certain individuals. The program consists of a 18 county component for each participating county and a matching 19 component of the state. Qualifying individuals may enroll in 20 both the county component and the matching component of the 21 student loan repayment program. 22 Each county designated by the authority as a rural 23 opportunity zone is eligible to create and implement a county 24 component within the student loan repayment program. Each 25 county component is required to contain the uniform terms and 26 conditions prescribed by the authority and shall have certain 27 minimum qualifications. First, the county component shall only 28 apply to resident individuals that have outstanding student 29 loan debt and that establish domicile in that county on or 30 after the county creates the county component of the program, 31 and prior to July 1, 2017. Second, the county component shall 32 provide that participating individuals are entitled to full 33 participation in the county component for five years, provided 34 the participating individual remains domiciled within that 35 -8- LSB 5419XS (7) 84 mm/sc 8/ 10

S.F. 2139 county for the entire five-year period. Third, the county 1 component shall agree to repay, subject to matching payments by 2 the authority over a five-year period, the lesser of 10 percent 3 of the outstanding student loan debt of the participating 4 individual, or $7,500 of the outstanding student loan debt of 5 the participating individual. A participating individual must 6 remain domiciled in the applicable county for the entirety 7 of a calendar year to receive repayment assistance for that 8 year. After a county creates and implements its county 9 component, it is required to provide a duly adopted resolution 10 to the authority by January 1, 2013. The resolution shall be 11 irrevocable and shall obligate the county to participate in the 12 program for a period of five years per individual. 13 Participating individuals who remain domiciled in that 14 county are eligible to receive repayment assistance from 15 the county component. In addition, the authority, through 16 the matching component, shall match each payment made under 17 the county component up to the lesser of 10 percent of the 18 outstanding student loan debt, or $7,500 of the outstanding 19 student loan debt. The maximum amount of repayment assistance 20 that an individual may receive under the program shall not 21 exceed the lesser of 20 percent of the outstanding student loan 22 debt or $15,000. 23 Matching payments from the authority shall be made from 24 a student loan repayment program fund created in the bill 25 and are subject to the availability of moneys in the fund. 26 Participating individuals are not guaranteed a right to receive 27 repayment assistance under the program. A county may, but is 28 not required, to provide repayment assistance under its county 29 component even if insufficient funds exist for the authority 30 to provide matching funds. The student loan repayment program 31 is repealed on June 30, 2023. 32 The bill provides an individual income tax credit for 33 taxpayers that are domiciled in a rural opportunity zone. 34 To be eligible for the credit, the taxpayer must meet 35 -9- LSB 5419XS (7) 84 mm/sc 9/ 10

S.F. 2139 seven requirements. First, the taxpayer must be a resident 1 individual. Second, the taxpayer must have been domiciled in 2 a rural opportunity zone for the entire tax year. Third, the 3 taxpayer must have established domicile in a rural opportunity 4 zone on or after July 1, 2012, and prior to January 1, 2017. 5 Fourth, the taxpayer must have been domiciled outside this 6 state for five or more years immediately prior to establishing 7 domicile in a rural opportunity zone. Fifth, the taxpayer 8 must have had Iowa source net income of less than $10,000 in 9 any one year for each of the five years immediately prior to 10 establishing domicile in a rural opportunity zone. Sixth, the 11 taxpayer’s tax return on which the rural opportunity zone tax 12 credit is claimed is timely filed, including any extension of 13 time to file. Seventh, the taxpayer must not be delinquent in 14 filing any tax return with this state or have any indebtedness 15 owed to the state or a political subdivision of the state. 16 The tax credit is equal to the taxpayer’s total individual 17 income tax owed to the state, computed without regard to 18 reductions for the rural opportunity zone credit, withholding 19 on the taxpayer’s wages or other income, and any estimated tax 20 payments made by the individual. The maximum amount that may 21 be refunded to a taxpayer in any year the rural opportunity 22 zone tax credit is allowed shall not exceed the sum of the 23 taxpayer’s withholding on wages or other income for that year, 24 plus the estimated tax payments made for that year. 25 The tax credit is allowed for five consecutive years 26 following the year the taxpayer first establishes domicile in a 27 rural opportunity zone. The rural opportunity zone tax credit 28 applies to tax years beginning on or after January 1, 2013, 29 and ending on or before December 31, 2021. The tax credit is 30 repealed on June 30, 2022. 31 -10- LSB 5419XS (7) 84 mm/sc 10/ 10