House Study Bill 542 - Introduced SENATE/HOUSE FILE _____ BY (PROPOSED ECONOMIC DEVELOPMENT AUTHORITY BILL) A BILL FOR An Act relating to the administration of programs by the 1 economic development authority by modifying the high quality 2 jobs program, creating a workforce housing tax incentives 3 program and making penalties applicable, and repealing the 4 enterprise zone program, and including effective date and 5 applicability provisions. 6 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 7 TLSB 5320XD (9) 85 mm/sc

S.F. _____ H.F. _____ DIVISION I 1 HIGH QUALITY JOBS PROGRAM 2 Section 1. Section 15.327, Code 2014, is amended by adding 3 the following new subsections: 4 NEW SUBSECTION . 3A. “Brownfield site” means the same as 5 defined in section 15.291. 6 NEW SUBSECTION . 12A. “Grayfield site” means the same as 7 defined in section 15.291. 8 NEW SUBSECTION . 17A. “Project” means an activity or set 9 of activities directly related to the start-up, location, 10 modernization, or expansion of a business, and proposed 11 in an application by a business, that will result in the 12 accomplishment of the goals of the program. 13 Sec. 2. Section 15.327, subsection 18, Code 2014, is amended 14 to read as follows: 15 18. “Project completion assistance” means financial 16 assistance or technical assistance provided to an eligible 17 business in order to facilitate the start-up, location, or 18 expansion of the business completion of a project in this state 19 and provided in an expedient manner to ensure the successful 20 completion of the start-up, location, or expansion project. 21 Sec. 3. Section 15.329, subsection 1, paragraph a, Code 22 2014, is amended to read as follows: 23 a. If the qualifying investment is ten million dollars or 24 more, the community has approved by ordinance or resolution the 25 start-up, location, or expansion of the business project for 26 the purpose of receiving the benefits of this part. 27 Sec. 4. Section 15.331A, subsection 1, Code 2014, is amended 28 to read as follows: 29 1. The eligible business shall be entitled to a refund 30 of the sales and use taxes paid under chapter 423 for gas, 31 electricity, water, or sewer utility services, goods, wares, or 32 merchandise, or on services rendered, furnished, or performed 33 to or for a contractor or subcontractor and used in the 34 fulfillment of a written contract relating to the construction 35 -1- LSB 5320XD (9) 85 mm/sc 1/ 28

S.F. _____ H.F. _____ or equipping of a facility that is part of a project of the 1 eligible business. Taxes attributable to intangible property 2 and furniture and furnishings shall not be refunded. However, 3 an eligible business shall be entitled to a refund for taxes 4 attributable to racks, shelving, and conveyor equipment to be 5 used in a warehouse or distribution center subject to section 6 15.331C . 7 Sec. 5. Section 15.332, subsection 1, Code 2014, is amended 8 to read as follows: 9 1. The community may exempt from taxation all or a portion 10 of the actual value added by improvements to real property 11 directly related to new jobs created by the location or 12 expansion of an eligible business under the program project 13 and used in the operations of the eligible business. The 14 exemption may be allowed for a period not to exceed twenty 15 years beginning the year the improvements are first assessed 16 for taxation. 17 Sec. 6. Section 15.333, subsection 1, Code 2014, is amended 18 to read as follows: 19 1. An eligible business may claim a tax credit equal to a 20 percentage of the new investment directly related to new jobs 21 created or retained by the location or expansion of an eligible 22 business under the program project . The tax credit shall be 23 amortized equally over five calendar years. The tax credit 24 shall be allowed against taxes imposed under chapter 422, 25 division II, III, or V , and against the moneys and credits tax 26 imposed in section 533.329 . If the business is a partnership, 27 S corporation, limited liability company, cooperative organized 28 under chapter 501 and filing as a partnership for federal tax 29 purposes, or estate or trust electing to have the income taxed 30 directly to the individual, an individual may claim the tax 31 credit allowed. The amount claimed by the individual shall 32 be based upon the pro rata share of the individual’s earnings 33 of the partnership, S corporation, limited liability company, 34 cooperative organized under chapter 501 and filing as a 35 -2- LSB 5320XD (9) 85 mm/sc 2/ 28

S.F. _____ H.F. _____ partnership for federal tax purposes, or estate or trust. The 1 percentage shall be determined as provided in section 15.335A . 2 Any tax credit in excess of the tax liability for the tax year 3 may be credited to the tax liability for the following seven 4 years or until depleted, whichever occurs first. 5 Sec. 7. Section 15.333, subsection 2, unnumbered paragraph 6 1, Code 2014, is amended to read as follows: 7 For purposes of this subsection , “new investment directly 8 related to new jobs created by the location or expansion of an 9 eligible business under the program project ” means the cost 10 of machinery and equipment, as defined in section 427A.1, 11 subsection 1 , paragraphs “e” and “j” , purchased for use in 12 the operation of the eligible business, the purchase price 13 of which has been depreciated in accordance with generally 14 accepted accounting principles, the purchase price of real 15 property and any buildings and structures located on the real 16 property, and the cost of improvements made to real property 17 which is used in the operation of the eligible business. “New 18 investment directly related to new jobs created by the location 19 or expansion of an eligible business under the program project ” 20 also means the annual base rent paid to a third-party developer 21 by an eligible business for a period not to exceed ten years, 22 provided the cumulative cost of the base rent payments for that 23 period does not exceed the cost of the land and the third-party 24 developer’s costs to build or renovate the building for the 25 eligible business. The eligible business shall enter into a 26 lease agreement with the third-party developer for a minimum 27 of five years. If, however, within five years of purchase, 28 the eligible business sells, disposes of, razes, or otherwise 29 renders unusable all or a part of the land, buildings, or other 30 existing structures for which tax credit was claimed under this 31 section , the tax liability of the eligible business for the 32 year in which all or part of the property is sold, disposed of, 33 razed, or otherwise rendered unusable shall be increased by one 34 of the following amounts: 35 -3- LSB 5320XD (9) 85 mm/sc 3/ 28

S.F. _____ H.F. _____ Sec. 8. Section 15.333A, subsection 1, Code 2014, is amended 1 to read as follows: 2 1. An eligible business may claim an insurance premium tax 3 credit equal to a percentage of the new investment directly 4 related to new jobs created by the location or expansion of an 5 eligible business under the program project . The tax credit 6 shall be amortized equally over a five-year period. The tax 7 credit shall be allowed against taxes imposed in chapter 432 . 8 A tax credit in excess of the tax liability for the tax year may 9 be credited to the tax liability for the following seven years 10 or until depleted, whichever occurs first. The percentage 11 shall be determined as provided in section 15.335A . 12 Sec. 9. Section 15.333A, subsection 2, unnumbered paragraph 13 1, Code 2014, is amended to read as follows: 14 For purposes of this section , “new investment directly 15 related to new jobs created by the location or expansion of an 16 eligible business under the program project ” means the cost 17 of machinery and equipment, as defined in section 427A.1, 18 subsection 1 , paragraphs “e” and “j” , purchased for use in 19 the operation of the eligible business, the purchase price 20 of which has been depreciated in accordance with generally 21 accepted accounting principles, the purchase price of real 22 property and any buildings and structures located on the real 23 property, and the cost of improvements made to real property 24 which is used in the operation of the eligible business. “New 25 investment directly related to new jobs created by the location 26 or expansion of an eligible business under the program project ” 27 also means the annual base rent paid to a third-party developer 28 by an eligible business for a period not to exceed ten years, 29 provided the cumulative cost of the base rent payments for that 30 period does not exceed the cost of the land and the third-party 31 developer’s costs to build or renovate the building for the 32 eligible business. The eligible business shall enter into a 33 lease agreement with the third-party developer for a minimum 34 of five years. If, however, within five years of purchase, 35 -4- LSB 5320XD (9) 85 mm/sc 4/ 28

S.F. _____ H.F. _____ the eligible business sells, disposes of, razes, or otherwise 1 renders unusable all or a part of the land, buildings, or other 2 existing structures for which tax credit was claimed under this 3 section , the tax liability of the eligible business for the 4 year in which all or part of the property is sold, disposed of, 5 razed, or otherwise rendered unusable shall be increased by one 6 of the following amounts: 7 Sec. 10. Section 15.335C, Code 2014, is amended to read as 8 follows: 9 15.335C Economically Wage thresholds for brownfield and 10 grayfield projects and economically distressed areas. 11 1. a. Notwithstanding section 15.329, subsection 1 , 12 paragraph “c” , the authority may provide tax incentives or 13 project completion assistance under this part to an eligible 14 a business paying for a project that will create or retain 15 jobs that will pay less than one hundred twenty percent of the 16 qualifying wage threshold if that business project is located 17 at a brownfield site, a grayfield site, or in an economically 18 distressed area. 19 b. (1) A business with a project located in an economically 20 distressed area or at a grayfield site and receiving incentives 21 or assistance pursuant to this section shall be required to pay 22 at least one hundred percent of the qualifying wage threshold 23 for jobs created or retained by the project . 24 (2) A business with a project located at a brownfield 25 site and receiving incentives or assistance pursuant to this 26 section shall be required to pay at least ninety percent of the 27 qualifying wage threshold for jobs created or retained by the 28 project. 29 2. For purposes of this section , “economically distressed 30 area” means a county that ranks among the bottom twenty-five 31 thirty-three of all Iowa counties, as measured by one of the 32 following: 33 a. Average monthly unemployment level for the most recent 34 twelve-month period. 35 -5- LSB 5320XD (9) 85 mm/sc 5/ 28

S.F. _____ H.F. _____ b. Average annualized unemployment level for the most recent 1 five-year period. 2 Sec. 11. APPLICABILITY. This division of this Act applies 3 to high quality jobs program agreements entered into by an 4 eligible business and the economic development authority on or 5 after the effective date of this division of this Act, and high 6 quality jobs program agreements entered into by an eligible 7 business and the economic development authority prior to the 8 effective date of this division of this Act shall be governed 9 by sections 15.327, 15.329, 15.333, 15.333A, and 15.335C, Code 10 2014. 11 DIVISION II 12 WORKFORCE HOUSING TAX INCENTIVES PROGRAM 13 Sec. 12. Section 15.119, subsection 2, Code 2014, is amended 14 by adding the following new paragraph: 15 NEW PARAGRAPH . g. The workforce housing tax incentives 16 program administered pursuant to sections 15.351 through 17 15.356. In allocating tax credits pursuant to this subsection, 18 the authority shall not allocate more than twenty million 19 dollars for purposes of this paragraph. 20 Sec. 13. NEW SECTION . 15.351 Short title. 21 This part shall be known and may be cited as the “Workforce 22 Housing Tax Incentives Program” . 23 Sec. 14. NEW SECTION . 15.352 Definitions. 24 As used in this part, unless the context otherwise requires: 25 1. “Brownfield site” means an abandoned, idled, or 26 underutilized property where expansion or redevelopment is 27 complicated by real or perceived environmental contamination. 28 A brownfield site includes property contiguous with the site 29 on which the property is located. A brownfield site does 30 not include property which has been placed, or is proposed 31 for placement, on the national priorities list established 32 pursuant to the federal Comprehensive Environmental Response, 33 Compensation, and Liability Act, 42 U.S.C. §9601 et seq. 34 2. “Community” means a city or county. 35 -6- LSB 5320XD (9) 85 mm/sc 6/ 28

S.F. _____ H.F. _____ 3. “Grayfield site” means a property meeting all of the 1 following requirements: 2 a. The property has been developed and has infrastructure in 3 place but the property’s current use is outdated or prevents a 4 better or more efficient use of the property. Such property 5 includes vacant, blighted, obsolete, or otherwise underutilized 6 property. 7 b. The property’s improvements and infrastructure are at 8 least twenty-five years old and one or more of the following 9 conditions exists: 10 (1) Thirty percent or more of a building located on the 11 property that is available for occupancy has been vacant or 12 unoccupied for a period of twelve months or more. 13 (2) The assessed value of the improvements on the property 14 has decreased by twenty-five percent or more. 15 (3) The property is currently being used as a parking lot. 16 (4) The improvements on the property no longer exist. 17 4. “Housing business” means a business that is a housing 18 developer, housing contractor, or nonprofit organization that 19 completes a housing project in the state. 20 5. “Housing project” means a project located in this state 21 meeting the requirements of section 15.353. 22 6. “Multi-use building” means a building whose street-level 23 ground story is used for a purpose that is other than 24 residential, and whose upper story or stories are currently 25 used for a residential purpose, or will be used for a 26 residential purpose after completion of the housing project 27 associated with the building. 28 7. “Program” means the workforce housing tax incentives 29 program administered under this part. 30 8. a. “Qualifying new investment” means costs that are 31 directly related to the acquisition, repair, rehabilitation, or 32 redevelopment of a housing project in this state. 33 b. “Qualifying new investment” includes costs that are 34 directly related to new construction of dwelling units if the 35 -7- LSB 5320XD (9) 85 mm/sc 7/ 28

S.F. _____ H.F. _____ new construction occurs in a distressed workforce housing 1 community. 2 c. The amount of costs that may be used to compute 3 “qualifying new investment” shall not exceed the costs used for 4 the first one hundred fifty thousand dollars of value for each 5 dwelling unit that is part of a housing project. 6 d. “Qualifying new investment” does not include the 7 following: 8 (1) The portion of the total cost of a housing project 9 that is financed by federal, state, or local government tax 10 credits, grants, forgivable loans, or other forms of financial 11 assistance that do not require repayment, excluding the tax 12 incentives provided under this part. 13 (2) If a housing project includes the rehabilitation, 14 repair, or redevelopment of an existing multi-use building, 15 the portion of the total acquisition costs of the multi-use 16 building, including a proportionate share of the total 17 acquisition costs of the land upon which the multi-use building 18 is situated, that are attributable to the street-level 19 ground story that is used for a purpose that is other than 20 residential. 21 Sec. 15. NEW SECTION . 15.353 Housing project requirements. 22 1. To receive workforce housing tax incentives pursuant to 23 the program, a proposed housing project shall meet all of the 24 following requirements: 25 a. The project includes at least one of the following: 26 (1) Four or more single-family dwelling units. 27 (2) One or more multiple dwelling unit buildings each 28 containing three or more individual dwelling units. 29 (3) Two or more dwelling units located in the upper story of 30 an existing multi-use building. 31 b. The project consists of any of the following: 32 (1) The rehabilitation, repair, or redevelopment of 33 dwelling units at a brownfield or grayfield site. 34 (2) The rehabilitation, repair, or redevelopment of 35 -8- LSB 5320XD (9) 85 mm/sc 8/ 28

S.F. _____ H.F. _____ dilapidated dwelling units. 1 (3) The rehabilitation, repair, or redevelopment of 2 dwelling units located in the upper story of an existing 3 multi-use building. 4 (4) (a) The new construction, rehabilitation, repair, 5 or redevelopment of dwelling units in a distressed workforce 6 housing community. 7 (b) The determination as to whether a community is 8 considered a distressed workforce housing community shall be 9 within the discretion of the authority after considering all 10 of the following: 11 (i) Whether or not the community has a severe housing 12 shortage relative to demand, low vacancy rates, or rising 13 housing costs combined with low unemployment. 14 (ii) The relative merits of all applications for 15 designation as a distressed workforce housing community. 16 (iii) The demand for projects applying under this 17 subparagraph compared to the demand for projects applying under 18 subparagraphs (1) through (3). 19 c. (1) Except as provided in subparagraph (2), the average 20 dwelling unit cost does not exceed two hundred thousand dollars 21 per dwelling unit. 22 (2) The average dwelling unit cost does not exceed two 23 hundred fifty thousand dollars per dwelling unit if the 24 project involves the rehabilitation, repair, redevelopment, or 25 preservation of eligible property, as that term is defined in 26 section 404A.1, subsection 2. 27 d. The dwelling units, when completed and made available 28 for occupancy, meet the United States department of housing 29 and urban development’s housing quality standards and all 30 applicable local safety standards. 31 Sec. 16. NEW SECTION . 15.354 Housing project application 32 and agreement. 33 1. Application. 34 a. A housing business seeking workforce housing tax 35 -9- LSB 5320XD (9) 85 mm/sc 9/ 28

S.F. _____ H.F. _____ incentives provided in section 15.355 shall make application to 1 the authority in the manner prescribed by the authority. The 2 authority may accept applications on a continuous basis. 3 b. The application shall include all of the following: 4 (1) The following information establishing local 5 participation for the housing project: 6 (a) A resolution in support of the housing project by the 7 community where the housing project will be located. 8 (b) Documentation of local matching funds pledged for the 9 housing project in an amount equal to at least one thousand 10 dollars per dwelling unit, including but not limited to 11 a funding agreement between the housing business and the 12 community where the housing project will be located. For 13 purposes of this paragraph, local matching funds shall be in 14 the form of cash or cash equivalents, or in the form of a local 15 property tax exemption, rebate, refund, or reimbursement. 16 (2) A report that meets the requirements and conditions of 17 section 15.330, subsection 9. 18 (3) Information showing the total costs and funding sources 19 of the housing project sufficient to allow the authority to 20 adequately determine the financing that will be utilized for 21 the housing project, the actual cost of the dwelling units, and 22 the amount of qualifying new investment. 23 (4) Any other information deemed necessary by the authority 24 to evaluate the eligibility and financial need of the housing 25 project under the program. 26 2. Registration. 27 a. Upon review of the application, the authority may 28 register the housing project under the program. If the 29 authority registers the housing project, the authority shall 30 make a preliminary determination as to the amount of tax 31 incentives for which the housing project qualifies. 32 b. After registering the housing project, the authority 33 shall notify the housing business of successful registration 34 under the program. The notification shall include the amount 35 -10- LSB 5320XD (9) 85 mm/sc 10/ 28

S.F. _____ H.F. _____ of tax incentives under section 15.355 for which the housing 1 business has received preliminary approval and a statement 2 that the amount is a preliminary determination only. The 3 amount of tax credits included on a tax credit certificate 4 issued pursuant to this section, or a claim for refund of sales 5 and use taxes, shall be contingent upon completion of the 6 requirements in subsection 3. 7 3. Agreement and fees. 8 a. Upon successful registration of the housing project, 9 the housing business shall enter into an agreement with the 10 authority for the successful completion of all requirements of 11 the program. 12 b. The compliance cost fees imposed in section 15.330, 13 subsection 12, shall apply to all agreements entered into 14 under this program and shall be collected by the authority in 15 the same manner and to the same extent as described in that 16 subsection. 17 c. A housing business shall complete its housing project 18 within three years from the date the housing project is 19 registered by the authority. 20 d. Upon completion of a housing project, an audit of 21 the project, completed by an independent certified public 22 accountant licensed in this state, shall be submitted to the 23 authority. 24 e. Upon review of the audit and verification of the amount 25 of the qualifying new investment, the authority may issue a tax 26 credit certificate to the housing business stating the amount 27 of workforce housing investment tax credits under section 28 15.355 the eligible housing business may claim. 29 4. Maximum tax incentives amount. 30 a. The maximum aggregate amount of tax incentives that may 31 be awarded under section 15.355 to a housing business for a 32 housing project shall not exceed one million dollars. 33 b. If a housing business qualifies for a higher amount 34 of tax incentives under section 15.355 than is allowed by 35 -11- LSB 5320XD (9) 85 mm/sc 11/ 28

S.F. _____ H.F. _____ the limitation imposed in paragraph “a” , the authority and 1 the housing business may negotiate an apportionment of the 2 reduction in tax incentives between the sales tax refund 3 provided in section 15.355, subsection 2, and the workforce 4 housing investment tax credits provided in section 15.355, 5 subsection 3, provided the total aggregate amount of tax 6 incentives after the apportioned reduction does not exceed the 7 amount in paragraph “a” . 8 c. The authority shall issue tax incentives under the 9 program on a first-come, first-served basis until the maximum 10 amount of tax incentives allocated pursuant to section 15.119, 11 subsection 2, is reached. The authority shall maintain a list 12 of registered housing projects under the program so that if 13 the maximum aggregate amount of tax incentives is reached in 14 a given fiscal year, registered housing projects that were 15 completed but for which tax incentives were not issued shall 16 be placed on a wait list in the order the registered housing 17 projects were completed and shall be given priority for 18 receiving tax incentives in succeeding fiscal years. 19 5. Termination and repayment. The failure by a housing 20 business in completing a housing project to comply with any 21 requirement of this program or any of the terms and obligations 22 of an agreement entered into pursuant to this section may 23 result in the reduction, termination, or recision of the 24 approved tax incentives and may subject the housing business 25 to the repayment or recapture of tax incentives claimed under 26 section 15.355. The repayment or recapture of tax incentives 27 pursuant to this section shall be accomplished in the same 28 manner as provided in section 15.330, subsection 2. 29 Sec. 17. NEW SECTION . 15.355 Workforce housing tax 30 incentives. 31 1. A housing business that has entered into an agreement 32 pursuant to section 15.354 is eligible to receive the tax 33 incentives described in subsections 2 and 3. 34 2. A housing business may claim a refund of the sales and 35 -12- LSB 5320XD (9) 85 mm/sc 12/ 28

S.F. _____ H.F. _____ use taxes paid under chapter 423 that are directly related 1 to a housing project. The refund available pursuant to this 2 subsection shall be as provided in section 15.331A to the 3 extent applicable for purposes of this program. 4 3. a. A housing business may claim a tax credit in 5 an amount not to exceed ten percent of the qualifying new 6 investment of a housing project. 7 b. The tax credit shall be allowed against the taxes imposed 8 in chapter 422, divisions II, III, and V, and in chapter 432, 9 and against the moneys and credits tax imposed in section 10 533.329. 11 c. An individual may claim a tax credit under this 12 subsection of a partnership, limited liability company, 13 S corporation, estate, or trust electing to have income 14 taxed directly to the individual. The amount claimed by the 15 individual shall be based upon the pro rata share of the 16 individual’s earnings from the partnership, limited liability 17 company, S corporation, estate, or trust. 18 d. Any tax credit in excess of the taxpayer’s liability 19 for the tax year is not refundable but may be credited to the 20 tax liability for the following five years or until depleted, 21 whichever is earlier. 22 e. (1) To claim a tax credit under this subsection, a 23 taxpayer shall include one or more tax credit certificates with 24 the taxpayer’s tax return. 25 (2) The tax credit certificate shall contain the taxpayer’s 26 name, address, tax identification number, the amount of the 27 credit, the name of the eligible housing business, any other 28 information required by the department of revenue, and a place 29 for the name and tax identification number of a transferee and 30 the amount of the tax credit being transferred. 31 (3) The tax credit certificate, unless rescinded by the 32 authority, shall be accepted by the department of revenue as 33 payment for taxes imposed pursuant to chapter 422, divisions 34 II, III, and V, and in chapter 432, and for the moneys and 35 -13- LSB 5320XD (9) 85 mm/sc 13/ 28

S.F. _____ H.F. _____ credits tax imposed in section 533.329, subject to any 1 conditions or restrictions placed by the authority upon 2 the face of the tax credit certificate and subject to the 3 limitations of this program. 4 (4) Tax credit certificates issued under section 15.354, 5 subsection 3, paragraph “e” , may be transferred to any person. 6 Within ninety days of transfer, the transferee shall submit the 7 transferred tax credit certificate to the department of revenue 8 along with a statement containing the transferee’s name, tax 9 identification number, and address, the denomination that each 10 replacement tax credit certificate is to carry, and any other 11 information required by the department of revenue. However, 12 tax credit certificate amounts of less than the minimum amount 13 established by rule of the authority shall not be transferable. 14 (5) Within thirty days of receiving the transferred 15 tax credit certificate and the transferee’s statement, the 16 department of revenue shall issue one or more replacement tax 17 credit certificates to the transferee. Each replacement tax 18 credit certificate must contain the information required for 19 the original tax credit certificate and must have the same 20 expiration date that appeared on the transferred tax credit 21 certificate. 22 (6) A tax credit shall not be claimed by a transferee 23 under this section until a replacement tax credit certificate 24 identifying the transferee as the proper holder has been 25 issued. The transferee may use the amount of the tax credit 26 transferred against the taxes imposed in chapter 422, divisions 27 II, III, and V, and in chapter 432, and against the moneys and 28 credits tax imposed in section 533.329, for any tax year the 29 original transferor could have claimed the tax credit. Any 30 consideration received for the transfer of the tax credit shall 31 not be included as income under chapter 422, divisions II, 32 III, and V. Any consideration paid for the transfer of the tax 33 credit shall not be deducted from income under chapter 422, 34 divisions II, III, and V. 35 -14- LSB 5320XD (9) 85 mm/sc 14/ 28

S.F. _____ H.F. _____ f. For purposes of the individual and corporate income 1 taxes and the franchise tax, the increase in the basis of the 2 property that would otherwise result from the qualifying new 3 investment shall be reduced by the amount of the tax credit 4 computed under this subsection. 5 Sec. 18. NEW SECTION . 15.356 Rules. 6 The authority and the department of revenue shall adopt 7 rules as necessary for the implementation and administration 8 of this part. 9 Sec. 19. NEW SECTION . 422.11C Workforce housing investment 10 tax credit. 11 The taxes imposed under this division, less the credits 12 allowed under section 422.12, shall be reduced by a workforce 13 housing investment tax credit allowed under section 15.355, 14 subsection 3. 15 Sec. 20. Section 422.33, Code 2014, is amended by adding the 16 following new subsection: 17 NEW SUBSECTION . 15. The taxes imposed under this division 18 shall be reduced by a workforce housing investment tax credit 19 allowed under section 15.355, subsection 3. 20 Sec. 21. Section 422.60, Code 2014, is amended by adding the 21 following new subsection: 22 NEW SUBSECTION . 12. The taxes imposed under this division 23 shall be reduced by a workforce housing investment tax credit 24 allowed under section 15.355, subsection 3. 25 Sec. 22. NEW SECTION . 432.12G Workforce housing investment 26 tax credit. 27 The taxes imposed under this chapter shall be reduced by a 28 workforce housing investment tax credit allowed under section 29 15.355, subsection 3. 30 Sec. 23. Section 533.329, subsection 2, Code 2014, is 31 amended by adding the following new paragraph: 32 NEW PARAGRAPH . k. The moneys and credits tax imposed under 33 this section shall be reduced by a workforce housing investment 34 tax credit allowed under section 15.355, subsection 3. 35 -15- LSB 5320XD (9) 85 mm/sc 15/ 28

S.F. _____ H.F. _____ DIVISION III 1 TERMINATION AND TRANSITION OF ENTERPRISE ZONE PROGRAM 2 Sec. 24. INVESTMENT TAX CREDITS ISSUED TO ELIGIBLE 3 HOUSING BUSINESSES UNDER THE ENTERPRISE ZONE PROGRAM —— 4 TRANSFERABILITY. Notwithstanding the requirement in section 5 15E.193B, subsection 8, Code 2014, that not more than three 6 million dollars worth of tax credits for housing developments 7 located in a brownfield site or a blighted area shall be 8 eligible for transfer in a calendar year unless the eligible 9 housing business is also eligible for low-income housing tax 10 credits authorized under section 42 of the Internal Revenue 11 Code, and notwithstanding the requirement in section 15E.193B, 12 subsection 8, Code 2014, that the economic development 13 authority shall not approve more than one million five hundred 14 thousand dollars in tax credit certificates for transfer to 15 any one eligible housing business located on a brownfield 16 site or in a blighted area in a calendar year, all investment 17 tax credits determined under section 15E.193B, subsection 6, 18 paragraph “a”, Code 2014, for housing developments located on 19 a brownfield site or in a blighted area may be approved by 20 the economic development authority for transfer in calendar 21 year 2014, or any subsequent calendar year, provided the 22 eligible housing business was awarded the investment tax credit 23 before the effective date of this section of this division 24 of this Act and notifies the economic development authority, 25 in writing, before July 1, 2014, of its intent to transfer 26 such tax credits, and provided the eligible housing business 27 and the related housing development meet all other applicable 28 requirements under section 15E.193B, Code 2014. 29 Sec. 25. Section 2.48, subsection 3, paragraph e, 30 subparagraph (9), Code 2014, is amended by striking the 31 subparagraph. 32 Sec. 26. Section 15.106B, subsection 5, paragraph c, Code 33 2014, is amended to read as follows: 34 c. Fees collected by the authority pursuant to this 35 -16- LSB 5320XD (9) 85 mm/sc 16/ 28

S.F. _____ H.F. _____ subsection shall be deposited in a fund within the state 1 treasury created pursuant to section 15.106A, subsection 1 , 2 paragraph “o” , and are appropriated to the authority for the 3 purposes set out in section 15.106A, subsection 1 , paragraph 4 “o” . However, fees collected by the authority pursuant to 5 section 15.330, subsection 12 , and section 15E.198 , Code 2014, 6 and section 15.354, subsection 2, paragraph “f” , shall be used 7 exclusively for costs associated with the administration of due 8 diligence and compliance. 9 Sec. 27. Section 15.119, subsection 2, paragraph b, Code 10 2014, is amended to read as follows: 11 b. The enterprise zones program administered pursuant to 12 sections 15E.191 through 15E.197 , Code 2014 . 13 Sec. 28. Section 15A.1, subsection 5, paragraph c, Code 14 2014, is amended by striking the paragraph. 15 Sec. 29. Section 15H.5, subsection 2, Code 2014, is amended 16 to read as follows: 17 2. The Iowa summer youth corps program is established 18 to provide meaningful summer enrichment programming to 19 Iowa youth. The program shall be administered by the Iowa 20 commission on volunteer service using a competitive grant 21 process to implement projects in accordance with program 22 requirements. The commission shall adopt administrative rules 23 for the program, including but not limited to incentives, grant 24 criteria, and grantee selection processes. A percentage of the 25 grants shall be designated by the commission to address the 26 needs of city enterprise zones that meet the distress criteria 27 outlined in section 15E.194 economically distressed areas as 28 defined in section 15.335C . 29 Sec. 30. Section 15H.5, subsection 5, paragraph c, Code 30 2014, is amended to read as follows: 31 c. The commission shall give priority consideration to 32 approving those projects that target communities that have 33 disproportionately high rates of juvenile crime or low rates 34 of high school graduation or that have been designated as city 35 -17- LSB 5320XD (9) 85 mm/sc 17/ 28

S.F. _____ H.F. _____ enterprise zones that meet the distress criteria outlined in 1 section 15E.194 economically distressed areas as defined in 2 section 15.335C . 3 Sec. 31. Section 15J.4, subsection 1, paragraph b, Code 4 2014, is amended to read as follows: 5 b. The area is was in whole or in part either an a 6 designated economic development enterprise zone designated 7 under chapter 15E, division XVIII , Code 2014, immediately prior 8 to the effective date of this Act, or the area is in whole or in 9 part an urban renewal area established pursuant to chapter 403 . 10 Sec. 32. Section 403.19A, subsection 3, paragraph j, Code 11 2014, is amended to read as follows: 12 j. An employer may participate in a new jobs credit from 13 withholding under section 260E.5 , or a supplemental new jobs 14 credit from withholding under section 15E.197 , Code 2014, 15 or under section 15.331 , Code 2005, at the same time as the 16 employer is participating in the withholding credit under this 17 section . Notwithstanding any other provision in this section , 18 the new jobs credit from withholding under section 260E.5 , and 19 the supplemental new jobs credit from withholding under section 20 15E.197 , Code 2014, or under section 15.331 , Code 2005, shall 21 be collected and disbursed prior to the withholding credit 22 under this section . 23 Sec. 33. Section 422.11F, subsection 2, Code 2014, is 24 amended to read as follows: 25 2. The taxes imposed under this division , less the credits 26 allowed under section 422.12 , shall be reduced by investment 27 tax credits authorized pursuant to sections section 15.333 and 28 section 15E.193B , subsection 6 , Code 2014 . 29 Sec. 34. Section 422.16A, Code 2014, is amended to read as 30 follows: 31 422.16A Job training withholding —— certification and 32 transfer. 33 Upon the completion by a business of its repayment 34 obligation for a training project funded under chapter 260E , 35 -18- LSB 5320XD (9) 85 mm/sc 18/ 28

S.F. _____ H.F. _____ including a job training project funded under section 15A.8 1 or repaid in whole or in part by the supplemental new jobs 2 credit from withholding under section 15A.7 or section 15E.197 , 3 Code 2014, the sponsoring community college shall report to 4 the economic development authority the amount of withholding 5 paid by the business to the community college during the 6 final twelve months of withholding payments. The economic 7 development authority shall notify the department of revenue 8 of that amount. The department shall credit to the workforce 9 development fund account established in section 15.342A 10 twenty-five percent of that amount each quarter for a period 11 of ten years. If the amount of withholding from the business 12 or employer is insufficient, the department shall prorate the 13 quarterly amount credited to the workforce development fund 14 account. The maximum amount from all employers which shall be 15 transferred to the workforce development fund account in any 16 year is four million dollars. 17 Sec. 35. Section 422.33, subsection 12, paragraph b, Code 18 2014, is amended to read as follows: 19 b. The taxes imposed under this division shall be reduced by 20 investment tax credits authorized pursuant to section 15.333 21 and section 15E.193B, subsection 6 , Code 2014 . 22 Sec. 36. Section 422.60, subsection 5, paragraph b, Code 23 2014, is amended to read as follows: 24 b. The taxes imposed under this division shall be reduced by 25 investment tax credits authorized pursuant to sections 15.333 26 and 15E.193B , subsection 6 , Code 2014 . 27 Sec. 37. Section 432.12C, subsection 2, Code 2014, is 28 amended to read as follows: 29 2. The taxes imposed under this chapter shall be reduced by 30 investment tax credits authorized pursuant to section 15.333A 31 and section 15E.193B, subsection 6 , Code 2014 . 32 Sec. 38. REPEAL. Sections 15E.191, 15E.192, 15E.193, 33 15E.193B, 15E.194, 15E.195, 15E.196, 15E.197, and 15E.198, Code 34 2014, are repealed. 35 -19- LSB 5320XD (9) 85 mm/sc 19/ 28