H.F. 397 DIVISION I 1 CONTRACT ADMINISTRATION 2 Section 1. Section 15.106B, subsection 4, paragraph c, Code 3 2013, is amended by striking the paragraph. 4 Sec. 2. Section 15.329, subsection 2, Code 2013, is amended 5 to read as follows: 6 2. a. If the authority finds that a business has a 7 record of violations of the law, including but not limited to 8 antitrust, environmental , and worker safety statutes, rules, 9 and regulations, that over a period of time that tends to show 10 a consistent pattern or that establishes intentional, criminal, 11 or reckless conduct in violation of such laws , the business 12 shall not qualify for economic development assistance under 13 this part, unless except as provided in paragraph “b” . 14 b. If the authority finds that the violations described 15 in paragraph “a” did not seriously affect public health or , 16 public safety, or the environment, or if it did, the authority 17 finds that there were mitigating circumstances involved, the 18 business may qualify for economic development assistance under 19 this part, notwithstanding paragraph “a” . 20 c. In making the findings and determinations regarding 21 violations, mitigating circumstances, and whether the business 22 is disqualified for economic development assistance under this 23 part, the authority shall be exempt from chapter 17A . 24 Sec. 3. Section 15.330, unnumbered paragraph 1, Code 2013, 25 is amended to read as follows: 26 A business shall enter into an agreement with the authority 27 specifying the requirements that must be met to confirm 28 eligibility pursuant to this part and the requirements that 29 must be maintained throughout the period of the agreement 30 in order to retain the incentives or financial assistance 31 received . The authority shall consult with the community 32 during negotiations relating to the agreement. The agreement 33 shall contain, at a minimum, the following provisions: 34 Sec. 4. Section 15.330, subsection 2, Code 2013, is amended 35 -1- LSB 1206HV (2) 85 ad/sc 1/ 5

H.F. 397 to read as follows: 1 2. The repayment of incentives or financial assistance 2 by the business if the business does not meet any of the 3 requirements of this part or the resulting agreement. The 4 repayment of incentives pursuant to this subsection shall be 5 considered a tax payment due and payable to the department of 6 revenue by any taxpayer who has claimed such incentives, and 7 the failure to make such a repayment may be treated by the 8 department of revenue in the same manner as a failure to pay 9 the tax shown due or required to be shown due with the filing of 10 a return or deposit form. In addition, the county shall have 11 the authority to take action to recover the value of property 12 taxes not collected as a result of the exemption provided to 13 the business under this part. 14 DIVISION II 15 MICROENTERPRISES 16 Sec. 5. Section 15.102, subsections 5 and 9, Code 2013, are 17 amended by striking the subsections. 18 Sec. 6. REPEAL. Section 15.240, Code 2013, is repealed. 19 DIVISION III 20 BROADBAND ACCESS GOVERNING BOARD 21 Sec. 7. 2009 Iowa Acts, chapter 173, section 13, subsection 22 5, paragraphs b, c, and d, are amended by striking the 23 paragraphs. 24 DIVISION IV 25 INDUSTRIAL PROPERTY TAX EXEMPTION APPROVALS 26 Sec. 8. Section 427B.1, subsection 1, Code 2013, is amended 27 to read as follows: 28 1. A city council, or a county board of supervisors as 29 authorized by section 427B.2 , may provide by ordinance for 30 a partial exemption from property taxation of the actual 31 value added to industrial real estate by the new construction 32 of industrial real estate, research-service facilities, 33 warehouses, distribution centers and the acquisition of or 34 improvement to machinery and equipment assessed as real estate 35 -2- LSB 1206HV (2) 85 ad/sc 2/ 5

H.F. 397 pursuant to section 427A.1, subsection 1 , paragraph “e” . “New 1 construction” means new buildings and structures and includes 2 new buildings and structures which are constructed as additions 3 to existing buildings and structures. “New construction” does 4 not include reconstruction of an existing building or structure 5 which does not constitute complete replacement of an existing 6 building or structure or refitting of an existing building or 7 structure, unless the reconstruction of an existing building 8 or structure is required due to economic obsolescence and the 9 reconstruction is necessary to implement recognized industry 10 standards for the manufacturing and processing of specific 11 products and the reconstruction is required for the owner 12 of the building or structure to continue to competitively 13 manufacture or process those products which determination shall 14 receive prior approval from the city council of the city or the 15 board of supervisors of the county upon the recommendation of 16 the economic development authority . The exemption shall also 17 apply to new machinery and equipment assessed as real estate 18 pursuant to section 427A.1, subsection 1 , paragraph “e” , unless 19 the machinery or equipment is part of the normal replacement 20 or operating process to maintain or expand the existing 21 operational status. “Research-service facilities” means a 22 building or group of buildings devoted primarily to research 23 and development activities, including , but not limited to , the 24 design and production or manufacture of prototype products for 25 experimental use, and corporate-research services which do not 26 have a primary purpose of providing on-site services to the 27 public. “Warehouse” means a building or structure used as a 28 public warehouse for the storage of goods pursuant to chapter 29 554, article 7 , except that it does not mean a building or 30 structure used primarily to store raw agricultural products 31 or from which goods are sold at retail. “Distribution center” 32 means a building or structure used primarily for the storage 33 of goods which are intended for subsequent shipment to retail 34 outlets. “Distribution center” does not mean a building or 35 -3- LSB 1206HV (2) 85 ad/sc 3/ 5

H.F. 397 structure used primarily to store raw agricultural products, 1 used primarily by a manufacturer to store goods to be used in 2 the manufacturing process, used primarily for the storage of 3 petroleum products, or used for the retail sale of goods. 4 EXPLANATION 5 This bill relates to the administration of duties and 6 programs of the economic development authority. 7 Division I of the bill eliminates the two-year limitation 8 on the length of a contract for services entered into by the 9 authority. 10 Currently, a business is generally ineligible to receive 11 economic development assistance under the high quality jobs 12 program if the business has a record that tends to show 13 a consistent pattern of violations of the law, including 14 environmental and worker safety laws as well as violations 15 of related rules and regulations. The division adds that 16 a business is also ineligible for economic development 17 assistance if the business engages in a pattern of antitrust 18 violations or if a business’s conduct in violating any laws, 19 including environmental, worker safety, and antitrust laws is 20 intentional, criminal, or reckless. 21 Current law requires that an agreement under the high 22 quality jobs program for assistance or incentives entered into 23 between the authority and a business include requirements for a 24 business’s eligibility for the incentives or assistance. The 25 bill adds that the agreement must also include the requirements 26 that a business receiving incentives or assistance must 27 maintain throughout the period of the agreement. The authority 28 must ensure that a business only receives the incentives or 29 assistance if the business meets the initial eligibility 30 requirements and maintains the program requirements throughout 31 the agreement period. 32 Current law also provides that an agreement under the high 33 quality jobs program must include the repayment of incentives 34 or assistance by a business if a business does not meet 35 -4- LSB 1206HV (2) 85 ad/sc 4/ 5

H.F. 397 the requirements in statute or the agreement. The division 1 provides that the repayment of incentives, in this context, is 2 a tax payment due and payable to the department of revenue by 3 a taxpayer, and the taxpayer’s failure to make the repayment 4 may be treated by the department of revenue in the same manner 5 as a failure to pay the tax shown or required to be shown 6 due when filing a return or deposit form. The division also 7 authorizes the county to recover property taxes exempted under 8 the agreement. 9 Division II of the bill eliminates the community 10 microenterprise development organization grant program. 11 Division III of the bill eliminates the broadband access 12 governing board created in 2009 Iowa Acts. The governing 13 board was tasked with establishing a comprehensive plan for 14 the deployment and sustainability of high-speed broadband 15 access in areas capable of timely implementation of the 16 access, establishing a competitive process for the disbursement 17 of funds for such deployment and sustainability, making 18 recommendations to the general assembly, and establishing and 19 maintaining separate accounts for the use of certain proceeds. 20 Division IV of the bill relates to the economic development 21 authority’s approval of industrial property tax exemptions. 22 The division eliminates the requirement that the economic 23 development authority recommend prior approval of industrial 24 property tax exemptions by local governments. 25 -5- LSB 1206HV (2) 85 ad/sc 5/ 5