S.F. 131 DIVISION I 1 SALES TAX REBATE FOR COUNTY DEVELOPMENT PROGRAM 2 Section 1. NEW SECTION . 15E.370 Short title. 3 This division shall be known and may be cited as the “Sales 4 Tax Rebate for County Development Program Act” . 5 Sec. 2. NEW SECTION . 15E.371 Definitions. 6 For purposes of this division, unless the context otherwise 7 requires: 8 1. “Base employment level” means the number of full-time 9 equivalent positions at a business, as established by the 10 authority and a business using the business’s payroll records, 11 as of the date a business applies for a financial assistance 12 award under the program. 13 2. “Base year” means the fiscal year immediately preceding 14 the year in which an application is made for participation in 15 the sales tax rebate for county development program. 16 3. “Created job” or “job created” means a new, permanent, 17 full-time equivalent position added to a business’s payroll in 18 excess of the business’s base employment level. 19 4. “Economic development entity” means a county board 20 of supervisors, city council, or not-for-profit business 21 association vested by a board of supervisors or city council 22 with the power to represent a particular city or unincorporated 23 area of a county under the program including but not limited 24 to an area chamber of commerce. 25 5. “Economic development project” means a project involving 26 private or joint public and private investment involving the 27 creation of new jobs and income or the retention of existing 28 jobs and income. An economic development project includes a 29 physical infrastructure project so long as it is undertaken 30 with the specific intent to create, attract, or retain jobs and 31 income. 32 6. “Financial assistance award” means assistance provided 33 only from a county’s account in the special fund established 34 pursuant to section 15E.373, subsection 1, and includes but 35 -1- LSB 1648XS (3) 85 mm/sc 1/ 19

S.F. 131 is not limited to assistance in the form of grants, loans, 1 forgivable loans, and royalty payments. 2 7. “Full-time equivalent position” means the same as defined 3 in section 15.327. 4 8. “Maintenance period” means the same as defined in section 5 15.327. 6 9. “Maintenance period completion date” means the date on 7 which the maintenance period ends. 8 10. “Physical infrastructure project” means a project 9 that creates necessary infrastructure for economic success 10 throughout Iowa, provides the foundation for the creation of 11 jobs, and involves the investment of a substantial amount of 12 capital. “Physical infrastructure project” includes but is 13 not limited to projects involving any mode of transportation; 14 public works and utilities such as sewer, water, power, or 15 telecommunications; physical improvements that mitigate, 16 prevent, or eliminate environmental contamination; and other 17 similar projects deemed to be physical infrastructure by the 18 authority. 19 11. “Program” means the sales tax rebate for county 20 development program. 21 12. “Program application” means an application by a county 22 to participate in the sales tax rebate for county development 23 program. 24 13. “Program year” means the fiscal year beginning July 25 1, 2013, and every fiscal year thereafter during which 26 the authority administers the sales tax rebate for county 27 development program. 28 14. “Project completion date” means the date by which a 29 recipient of a financial assistance award has agreed to meet 30 all the terms and obligations contained in an agreement with 31 the authority as that date is specified in the agreement 32 pursuant to section 15E.373, subsection 6, paragraph “a” . 33 15. “Retained job” means the same as defined in section 34 15.327. 35 -2- LSB 1648XS (3) 85 mm/sc 2/ 19

S.F. 131 Sec. 3. NEW SECTION . 15E.372 Sales tax rebate for county 1 development program —— establishment and application. 2 1. The authority shall establish and administer a sales 3 tax rebate for county development program to provide counties 4 participating in the program with a one-time, limited rebate 5 of sales tax imposed and collected by retailers upon sales of 6 tangible personal property or services furnished to purchasers 7 within the county. The rebate shall be used to provide 8 financial assistance awards to local economic development 9 projects pursuant to this division. 10 2. a. A county board of supervisors may make application 11 to the authority for participation in the program. Program 12 applications shall be received by November 30, 2013, to be 13 eligible for consideration in the first year of the program, 14 and by November 30 for every year thereafter. 15 b. Program applications shall be made in the manner and form 16 prescribed by the authority and shall contain, at a minimum, 17 the following information: 18 (1) The identity of the economic development entity located 19 in the county that is designated as eligible to apply for 20 financial assistance awards under the program. 21 (a) A city council shall designate one economic development 22 entity to represent it under the program. 23 (b) A county board of supervisors shall designate one 24 economic development entity to represent the unincorporated 25 area of the county under the program. 26 (c) An economic development entity may represent more 27 than one city or county under the program, but no city or 28 unincorporated area of a county shall be represented by more 29 than one economic development entity. 30 (2) Sufficient information to enable the authority to make 31 selections based on the criteria provided in subsection 3, 32 paragraphs “a” through “d” . 33 3. After receiving the timely filed program applications 34 for a program year, the authority may, within sixty days, 35 -3- LSB 1648XS (3) 85 mm/sc 3/ 19

S.F. 131 select no more than ten counties to participate in the program. 1 In making selection decisions, the authority shall consider all 2 information contained in a program application, as well as any 3 other relevant information and economic data, giving priority 4 to the following: 5 a. A recent business closure or permanent layoff in a county 6 that has, or may have, a significant negative economic impact 7 in the county. For purposes of this paragraph, “recent business 8 closure or permanent layoff” means the loss of full-time 9 employees, not including retail employees, at one or more 10 places or businesses within the county. To qualify as a loss 11 of a full-time employee, the loss must occur because of the 12 removal of the job to an out-of-state location, the cessation 13 of one or more production lines, the removal of manufacturing 14 machinery and equipment, or similar actions determined to be 15 equivalent in nature by the authority. Loss of full-time 16 employees does not include a layoff of seasonal employees or a 17 layoff that is seasonal in nature. 18 b. A potential economic development project that exists or 19 may exist within a county. 20 c. An unemployment rate for a county that is greater than 21 the state average rate of unemployment. 22 d. A loss of population in a county as shown by the 2010 23 certified federal census when compared with the 2000 certified 24 federal census. 25 4. A county chosen by the authority for participation 26 in the program that receives a sales tax rebate pursuant to 27 section 423.4, subsection 11, paragraph “b” , subparagraph (3), 28 is ineligible to submit another program application to the 29 authority for participation in the program. 30 5. a. If a member of the governing body of a city or county 31 or an employee of the state, city, or county or member of the 32 governing body or employee of any other governmental entity 33 of the state, city, or county involved in the program has 34 an interest, either direct or indirect, in a private person, 35 -4- LSB 1648XS (3) 85 mm/sc 4/ 19

S.F. 131 contract, or entity for which financial assistance may be 1 provided under the program, the interest shall be disclosed to 2 that governing body or governmental entity and the authority, 3 in writing. The member or employee having the interest shall 4 not participate in the decision-making process with regard 5 to the providing of such financial assistance to the private 6 person or entity. 7 b. Employment by the state, city, county, or other 8 governmental entity, its agencies or institutions, or by any 9 other person having such an interest in the program shall not 10 be deemed an indicia of an interest by the employee or of 11 any ownership or control of the employer’s interests by the 12 employee. 13 c. The word “participate” or “participation” does not 14 include discussion or debate preliminary to a vote of a 15 governmental entity, local governing body, or local agency upon 16 proposed ordinances or resolutions relating to an economic 17 development project or any abstention from such a vote. 18 d. The designation of a bank or trust company as depository, 19 paying agent, or agent for investment of funds shall not be 20 deemed a matter of interest or personal interest. 21 e. Stock ownership in a corporation, or other equity 22 interest in a business, having such an interest shall not be 23 deemed an indicia of an interest or of ownership or control by 24 the person owning the stock or equity interest when less than 25 five percent of the outstanding stock or equity interest of 26 the corporation or business is owned or controlled directly or 27 indirectly by that person. 28 f. A violation of a provision of this subsection is 29 misconduct in office under section 721.2. However, a decision 30 of the governing body or governmental entity is not invalid 31 because of the participation of the member or employee in 32 the decision-making process or because of a vote cast by a 33 member or employee in violation of this subsection unless the 34 participation or vote was decisive in the awarding of the 35 -5- LSB 1648XS (3) 85 mm/sc 5/ 19

S.F. 131 financial assistance. 1 g. For purposes of this subsection, any private 2 not-for-profit economic development entity representing a city 3 or county under the program shall be considered a governmental 4 entity subject to the conflict of interest provisions in this 5 subsection. 6 6. The authority shall promptly notify the department 7 of revenue of each county that submits an application for 8 participation in the program and each county chosen for 9 participation in the program. The department of revenue shall 10 credit the sales tax receipts as calculated in section 423.4, 11 subsection 11, paragraph “b” , subparagraph (3), to the county’s 12 account in the special fund created under section 15E.373. 13 Sec. 4. NEW SECTION . 15E.373 Special fund —— appropriation 14 and allocation of rebate moneys —— agreement. 15 1. The authority shall establish a special fund in the 16 state treasury under the control of the authority, and within 17 that fund create a separate account for each county chosen for 18 participation in the program. The fund shall consist only 19 of amounts credited by the department of revenue pursuant to 20 section 423.4, subsection 11, paragraph “b” , subparagraph 21 (3). The special fund shall be administered, allocated, and 22 distributed only as provided in this section. 23 2. Interest or earnings on moneys in a special fund shall 24 revert to the general fund. 25 3. All moneys remaining in a special fund after five years 26 from the date the credit is made shall revert to the general 27 fund. 28 4. An economic development entity designated in the 29 program application of a participating county may apply to the 30 authority for a financial assistance award from the county’s 31 account in the special fund, to be used for the purpose of an 32 economic development project. 33 a. Applications shall be made in the manner and form 34 prescribed by the authority and shall contain, at a minimum, 35 -6- LSB 1648XS (3) 85 mm/sc 6/ 19

S.F. 131 the following information: 1 (1) The amount requested and a detailed description of 2 how the moneys will be used including but not limited to a 3 description and purpose of the proposed economic development 4 project. 5 (2) The goal of the proposed economic development project, 6 including the projected jobs and income created or retained. 7 (3) The projected source, type, and amount of any private 8 capital or other investment involved with the proposed economic 9 development project. The authority shall not require any 10 economic development entity, county, or city to provide, or 11 demonstrate an ability to provide, local matching moneys 12 in order to receive a financial assistance award under the 13 program. 14 (4) A list of all public and private parties involved with 15 the proposed economic development project. 16 b. If upon review of an application for a financial 17 assistance award, the authority finds that the proposed 18 economic development project meets the definition of an 19 economic development project in section 15E.371, the authority 20 and the recipient of the financial assistance award shall enter 21 into an agreement pursuant to subsection 6. 22 5. a. For each city and the unincorporated area within a 23 county, the aggregate financial assistance awards paid from the 24 county’s account in the special fund for economic development 25 projects shall not exceed an amount which is equal to the 26 lesser of the following: 27 (1) The state sales tax imposed and collected within that 28 city or unincorporated area for the base year, as calculated in 29 section 423.4, subsection 11, paragraph “b” , subparagraph (2). 30 (2) An amount equal to the same proportion of the credit 31 made pursuant to section 423.4, subsection 11, paragraph “b” , 32 subparagraph (3), as the amount of state sales tax imposed and 33 collected in the city or unincorporated area for the base year, 34 as calculated in section 423.4, subsection 11, paragraph “b” , 35 -7- LSB 1648XS (3) 85 mm/sc 7/ 19

S.F. 131 subparagraph (2), bears to the total amount of state sales 1 tax imposed and collected in the county for the base year, as 2 calculated in section 423.4, subsection 11, paragraph “b” , 3 subparagraph (1). 4 b. Notwithstanding paragraph “a” , the board of supervisors 5 may elect to allocate all or a portion of the county’s share of 6 moneys in the special fund to one or more cities in the county, 7 and a city council may elect to allocate all or a portion of 8 the city’s share of moneys in the special fund to a different 9 city or to the unincorporated area within the same county if 10 the board or council, as applicable, determines all of the 11 following: 12 (1) That a viable proposal for an economic development 13 project does not currently exist within the allocating city or 14 the unincorporated area of the allocating county, and it is 15 unlikely that one will be developed before the expiration of 16 the five-year period set forth in subsection 3. 17 (2) That the proposed economic development project to which 18 it wishes to allocate all or a portion of its share of moneys 19 in the special fund will directly and materially benefit the 20 allocating city or county. For purposes of this subparagraph, 21 “directly and materially benefit” means an increase in jobs, 22 population, or tax revenue within the allocating city or the 23 unincorporated area of the allocating county. 24 6. The authority and the recipient of the financial 25 assistance shall enter into an agreement describing the terms 26 and obligations under which the financial assistance will be 27 provided. The authority, in consultation with the applicable 28 economic development entity, may negotiate the terms and 29 obligations of the agreement. An agreement shall contain 30 but need not be limited to all of the following terms and 31 obligations: 32 a. A project completion date. 33 b. A maintenance period completion date. 34 c. The number of jobs to be created or retained. 35 -8- LSB 1648XS (3) 85 mm/sc 8/ 19

S.F. 131 d. The amount of private capital or other investment to be 1 involved. 2 e. The amount of the financial assistance award to be 3 provided under the program. 4 7. The authority may enforce the terms and obligations of 5 agreements described in subsection 6. 6 8. A recipient of a financial assistance award shall meet 7 all terms and obligations in an agreement by the project 8 completion date, but the authority may for good cause extend 9 the project completion date. 10 9. During the maintenance period, a recipient of a financial 11 assistance award shall continue to comply with the terms and 12 obligations of an agreement entered into pursuant to subsection 13 6. 14 10. During the entire life of an agreement entered into 15 pursuant to subsection 6, if the recipient of a financial 16 assistance award fails to meet all terms and obligations in 17 its agreement or experiences a layoff within this state or 18 closes any of its facilities within this state, the authority 19 may reduce or eliminate some or all of the amount of financial 20 assistance award to be received. If the recipient of a 21 financial assistance award under this section fails to meet all 22 terms and obligations in its agreement or experiences a layoff 23 within this state or closes any of its facilities within this 24 state, the recipient may be subject to repayment of all or a 25 portion of the financial assistance award it has received. Any 26 amount of reduction or elimination of financial assistance and 27 any amount repaid to the authority under this subsection shall 28 revert to the general fund. 29 11. In addition to the terms and obligations agreed 30 to pursuant to subsection 6, the recipient of a financial 31 assistance award shall be subject to all of the following 32 requirements: 33 a. The potential recipient of a financial assistance 34 award shall submit to the authority a report describing all 35 -9- LSB 1648XS (3) 85 mm/sc 9/ 19

S.F. 131 violations of environmental law or worker safety law within 1 the last five years by the private parties involved in the 2 proposed economic development project. If, upon review of the 3 report, the authority finds that a private party has a record 4 of violations of the law, statutes, rules, or regulations that 5 tends to show a consistent pattern, the authority shall not 6 make an award of financial assistance to the project unless the 7 authority finds either that the violations did not seriously 8 affect public health, public safety, or the environment, or, 9 if such violations did seriously affect public health, public 10 safety, or the environment, that mitigating circumstances were 11 present. 12 b. The recipient of a financial assistance award shall not 13 have closed, or substantially reduced, operations in one area 14 of this state and relocated substantially the same operations 15 in a community in another area of this state. However, this 16 section shall not be construed to prohibit the recipient of a 17 financial assistance award from expanding its operation in a 18 community if existing operations of a similar nature in this 19 state are not closed or substantially reduced. 20 c. The recipient of a financial assistance award shall only 21 employ individuals legally authorized to work in this state. 22 In addition to any and all other applicable penalties provided 23 by current law, all or a portion of the financial assistance 24 award is subject to reduction, elimination, or repayment to 25 the authority by the recipient if the recipient is found to 26 knowingly employ individuals not legally authorized to work 27 in this state. Any amount of reduction or elimination of 28 financial assistance and any amount repaid to the authority 29 under this paragraph shall revert to the general fund. 30 12. Funds and financial assistance awards issued by 31 the authority under this program to any party shall not be 32 deposited in the general fund of any economic development 33 entity, county, or city, nor used for any of the following 34 purposes: 35 -10- LSB 1648XS (3) 85 mm/sc 10/ 19

S.F. 131 a. Salaries or bonuses of any person employed by an economic 1 development entity, county, or city. 2 b. Consultant fees. 3 c. Marketing fees. 4 d. Operating expenses of an economic development entity, 5 county, or city. 6 13. The authority shall adopt rules for the administration 7 of this division in accordance with chapter 17A. To the extent 8 necessary, the rules shall provide for the inclusion of uniform 9 terms and obligations in agreements between the authority 10 and the recipients of financial assistance awards under the 11 program. 12 DIVISION II 13 CALCULATION AND ISSUANCE OF SALES TAX REBATE 14 Sec. 5. Section 423.4, Code 2013, is amended by adding the 15 following new subsection: 16 NEW SUBSECTION . 11. a. For purposes of this subsection: 17 (1) “Authority” means the economic development authority 18 created in section 15.105. 19 (2) “Base year” means the same as defined in section 20 15E.371. 21 (3) “Program” means the sales tax rebate for county 22 development program in chapter 15E, division XXVIII. 23 (4) “Program application” means an application by a county 24 to participate in the sales tax rebate for county development 25 program in chapter 15E, division XXVIII. 26 (5) “Program year” means the same as defined in section 27 15E.371. 28 (6) “State sales tax” means sales tax imposed in section 29 423.2. However, and notwithstanding any other law to the 30 contrary, “state sales tax” does not include any local option 31 sales and services taxes imposed pursuant to chapter 423B or 32 any state sales tax revenues required to be transferred to the 33 natural resources and outdoor recreation trust fund created in 34 section 461.31 or the secure an advanced vision for education 35 -11- LSB 1648XS (3) 85 mm/sc 11/ 19

S.F. 131 fund created in section 423F.2. 1 b. The department shall assist in the administration of the 2 sales tax rebate for county development program in chapter 15E, 3 division XXVIII, and issue rebates of state sales tax imposed 4 and collected by retailers upon sales of tangible personal 5 property or services furnished to purchasers within a county in 6 the following manner and amounts: 7 (1) Upon notice by the authority of its applications for a 8 program year, the department shall calculate the total state 9 sales tax imposed and collected by retailers upon sales of 10 tangible personal property or services furnished to purchasers 11 in each applicant county for the base year of the program 12 application and provide that information to the authority on or 13 before December 31 of the program year. 14 (2) Upon notice by the authority of its selection of a 15 county for participation in the program, the department shall 16 calculate the total state sales tax imposed and collected by 17 retailers upon sales of tangible personal property or services 18 furnished to purchasers for each city and unincorporated area 19 within that county for the base year of the program application 20 and provide that information to the county and the authority on 21 or before March 1 of the program year. 22 (3) Upon notice by the authority of its selection of a 23 county for participation in the program, the department shall 24 credit to the county’s account in the special fund created in 25 section 15E.373 an amount equal to the state sales tax imposed 26 and collected by retailers upon sales of tangible personal 27 property or services furnished to purchasers in the county 28 for the base year of the program application, or five million 29 dollars, whichever is less. The credit shall be made by March 30 15 of the program year to the county’s account in the special 31 fund under the control of the authority to be administered 32 and distributed by the authority pursuant to section 15E.373. 33 Notwithstanding any other law to the contrary, the credit in 34 this subparagraph (3) shall be calculated using state sales tax 35 -12- LSB 1648XS (3) 85 mm/sc 12/ 19

S.F. 131 revenues remaining after the transfers prescribed in section 1 423.2, subsection 11, paragraph “b” , subparagraphs (1) through 2 (3), and shall not diminish or otherwise affect the amounts 3 transferred pursuant to those subparagraphs. 4 DIVISION III 5 ANNUAL REPORT TO GENERAL ASSEMBLY AND GOVERNOR 6 Sec. 6. Section 15.107B, subsection 2, Code 2013, is amended 7 by adding the following new paragraph: 8 NEW PARAGRAPH . f. Data on the sales tax rebate for county 9 development program established pursuant to chapter 15E, 10 division XXVIII, including all of the following for each 11 participant county: 12 (1) The identity of each economic development entity 13 designated to represent the cities and unincorporated area of 14 the county. 15 (2) A report of all deposits, withdrawals, and expenditures 16 made from the special fund of the county. 17 (3) A description of each proposed economic development 18 project disapproved for a financial assistance award by the 19 authority and the reason for disapproval. 20 (4) For each economic development project awarded financial 21 assistance: 22 (a) The project’s description and location. 23 (b) The amount of financial assistance awarded to the 24 project and the amount of the award actually paid to the 25 economic development entity as of June 30 of the fiscal year. 26 (c) If applicable, the number of created or retained 27 jobs contracted for and the actual number of jobs created or 28 retained as a result of the project. 29 (d) The amount of private capital or other investment 30 contracted for and the actual amount of private capital or 31 other investment made as a result of the project. 32 (e) Other terms and obligations contracted for and the 33 actual terms and obligations complied with and fulfilled as a 34 result of the project. 35 -13- LSB 1648XS (3) 85 mm/sc 13/ 19

S.F. 131 EXPLANATION 1 This bill relates to a sales tax rebate for county 2 development program. 3 Division I of the bill relates to the creation and 4 administration of the program. 5 The division requires the economic development authority 6 (EDA) to create and administer a program to participating 7 counties in the state with a one-time, limited sales tax rebate 8 to be used to provide financial assistance awards to local 9 economic development projects. “Economic development project” 10 is defined as a project involving private or joint public 11 and private investment involving the creation of new jobs 12 and income or the retention of existing jobs and income. An 13 economic development project includes a physical infrastructure 14 project, as defined in the bill, so long as it is undertaken 15 with the specific intent to create, attract, or retain jobs and 16 income. 17 The EDA may choose up to 10 counties per year to participate 18 in the program and receive a sales tax rebate, with the rebates 19 first payable during the fiscal year beginning July 1, 2013. 20 Applications for participation by a prospective county are to 21 be made by November 30 by the county board of supervisors. 22 As part of the application, each city council and the county 23 board of supervisors for the unincorporated area is required 24 to designate one economic development entity to represent it 25 under the program. “Economic development entity” is defined as 26 a county board of supervisors, city council, or not-for-profit 27 business association vested by a board of supervisors or city 28 council with the power to represent it under the program. An 29 economic development entity may represent more than one city 30 or county under the program, but no city or unincorporated 31 area of a county may be represented by more than one economic 32 development entity. In addition, each application is required 33 to have information pertaining to recent business closures 34 or permanent layoffs that have, or may have, a significant 35 -14- LSB 1648XS (3) 85 mm/sc 14/ 19

S.F. 131 negative impact in the county, potential economic development 1 projects that exist or may exist within the county, the current 2 unemployment rate of the county, and the county’s population 3 for the two most recently completed federal censuses. 4 The EDA has 60 days after November 30 to choose up to 5 10 counties to participate in the program. In making its 6 selection decisions, the EDA is required to consider all 7 information contained in a program application and any other 8 relevant information, giving priority to counties that have 9 had a recent business closure or permanent layoff with a 10 significant negative impact in the county, that have potential 11 economic development projects in the county, that have 12 unemployment rates greater than the state average, and that 13 have experienced a recent loss of population. 14 Each county is eligible to participate in the program 15 one time. A county chosen for participation shall receive 16 a sales tax rebate from the department of revenue equal to 17 the state sales tax imposed and collected by retailers upon 18 sales of tangible personal property or services furnished to 19 purchasers in that county for the base year of the county’s 20 application, or $5 million, whichever is less. A county’s 21 “base year” is defined as the fiscal year immediately preceding 22 the program year for which the program application is made. 23 The rebate applies only to the state sales tax imposed in Code 24 section 423.2, and not to any local option sales and services 25 tax imposed pursuant to Code chapter 423B, or to any state 26 sales tax revenues required to be transferred to the natural 27 resources and outdoor recreation trust fund created in Code 28 section 461.31 or the secure an advanced vision for education 29 fund created in Code section 423F.2. The rebate shall be 30 issued by the department of revenue in the form of a credit 31 made by March 15 of the program year into the county’s account 32 in a special fund to be administered and distributed by the 33 EDA. Any moneys remaining in a special fund after five years 34 from the date the credit is made shall revert to the general 35 -15- LSB 1648XS (3) 85 mm/sc 15/ 19

S.F. 131 fund of the state. Any interest or earnings on moneys in a 1 special fund shall immediately revert to the general fund of 2 the state. 3 An economic development entity designated in a participating 4 county’s program application may apply to the EDA for a 5 financial assistance award from the county’s account in the 6 special fund, provided it is used exclusively for an economic 7 development project. Applications for funds are to be made in 8 the manner and form developed by the EDA and shall contain, 9 at a minimum, the amount requested and a detailed description 10 of how the moneys will be used; the description and purpose 11 of the proposed project; the goal of the proposed project and 12 estimated jobs and income created or retained; the projected 13 source, type, and amount of any private capital or other 14 investment involved with the proposed project; and a list of 15 all public and private parties involved with the proposed 16 project. 17 The EDA is not allowed to require any economic development 18 entity, county, or city to provide, or demonstrate an ability 19 to provide, local matching moneys in order to receive a 20 financial assistance award under the program. 21 The maximum aggregate financial assistance awards paid 22 from the special fund of a participant county for economic 23 development projects within a city or unincorporated area shall 24 not exceed an amount which is the lesser of the total amount 25 of state sales tax imposed and collected in that city or the 26 unincorporated area for the base year of the county’s program 27 application, or an amount equal to the same proportion of the 28 county’s rebate received from the department of revenue, as the 29 amount of state sales tax imposed and collected in that city 30 or the unincorporated area for the base year of the county’s 31 program application bears to the total amount of state sales 32 tax imposed and collected in that county for the base year 33 of the program application. However, the county board of 34 supervisors may elect to allocate all or a portion of its share 35 -16- LSB 1648XS (3) 85 mm/sc 16/ 19

S.F. 131 of a county’s special fund to one or more cities in the county, 1 and a city may elect to allocate its portion to a different 2 city or to the unincorporated area within that same county if 3 the city council or board of supervisors, as applicable, makes 4 a determination based on factors specified in the bill. 5 If the EDA determines that a proposed economic development 6 project meets the definition of “economic development project” 7 described above, it shall enter into an agreement with the 8 recipient of the financial assistance award that describes the 9 terms and obligations under which the financial assistance 10 will be provided. An agreement shall contain, at a minimum, 11 the project completion date, maintenance period completion 12 date, the number of jobs to be created or retained, the amount 13 of private capital or other investment to be involved, and 14 the amount of financial assistance to be provided. “Project 15 completion date” means the date by which a financial assistance 16 award recipient has agreed to meet all the terms and conditions 17 contained in its agreement with the EDA. The maintenance period 18 refers to the period of time between the project completion 19 date and the maintenance period completion date. “Maintenance 20 period completion date” is defined as the date on which the 21 maintenance period ends. 22 The division also lists several requirements that the 23 potential recipient of a financial award must fulfill. First, 24 potential financial award recipients must submit to the EDA 25 a report describing all violations of environmental law and 26 worker safety in the last five years. The EDA must deny a 27 financial assistance award if it finds a consistent pattern 28 of violations unless mitigating circumstances were present. 29 Second, potential financial award recipients must not have 30 closed or substantially reduced operations in one area of 31 this state and relocated substantially the same operations 32 in another community in another area of this state. Third, 33 potential financial award recipients must only employ 34 individuals legally authorized to work in this state. 35 -17- LSB 1648XS (3) 85 mm/sc 17/ 19

S.F. 131 During the life of the agreement, the EDA may reduce, 1 eliminate, or seek repayment of some or all of the financial 2 assistance awarded if a recipient fails to meet all the terms 3 and obligations of its agreement, experiences a layoff or 4 closes any facilities within the state, or employs individuals 5 not legally authorized to work in this state. Any amount 6 reduced or eliminated by the EDA, or repaid to the EDA, shall 7 revert to the general fund. 8 The division provides that funds and financial assistance 9 awards issued under the program to any party shall not be 10 deposited in the general fund of any economic development 11 entity, county, or city, nor used for operating expenses of any 12 economic development entity, county, or city, or for salaries 13 or bonuses of any person employed by an economic development 14 entity, county, or city. It further provides that funds and 15 financial assistance awards shall not be used for consulting 16 fees or marketing fees. 17 The division provides conflict of interest provisions that 18 apply to any member of a governing body of a city or county or 19 an employee of a state, city, or county, or other governmental 20 entity of this state that has an interest, either direct 21 or indirect, in a private person, contract, or entity for 22 which financial assistance may be provided under the program. 23 For purposes of the conflict of interest provisions, any 24 not-for-profit economic development entity representing a city 25 or county shall be considered a governmental entity subject 26 to the conflict of interest provisions. The bill provides 27 that violations of the conflict of interest provisions are 28 considered misconduct in office under Code section 721.2 and 29 classified as a serious misdemeanor. A serious misdemeanor is 30 punishable by confinement for no more than one year and a fine 31 of at least $315 but not more than $1,875. 32 The division provides that the EDA shall adopt rules for the 33 administration of the sales tax rebate for county development 34 program and provide for the inclusion of uniform terms and 35 -18- LSB 1648XS (3) 85 mm/sc 18/ 19

S.F. 131 obligations in agreements between the EDA and recipients of 1 financial assistance awards under the program. 2 Division II of the bill relates to the calculation and 3 issuance of sales tax rebates by the department of revenue. 4 The division provides that the department of revenue will 5 assist the EDA in administering the sales tax rebate for 6 county development program by calculating the total state 7 sales tax imposed and collected by retailers upon sales of 8 tangible personal property or services furnished to purchasers 9 pursuant to Code section 423.2 in each applicant county for 10 the base year of each program application. The department is 11 responsible for calculating the same amounts for each city 12 and unincorporated area within any county that is chosen 13 for participation in the program, and then crediting the 14 appropriate amount by March 15 of the program year to a 15 county’s account in a special fund established in the state 16 treasury under the control of the EDA. 17 Division III of the bill relates to an annual report prepared 18 by the EDA. 19 The division provides that the EDA shall include a report 20 on the sales tax rebate for county development program in 21 its annual report to the general assembly. The report shall 22 include the identity of each economic development entity 23 designated to represent cities and the unincorporated areas 24 under the program; a report of all deposits, withdrawals, and 25 expenditures made from special funds of the counties; and a 26 description of each disapproved economic development project 27 and the reason for disapproval. For each approved project, 28 the report shall include a description and the location of the 29 project, the amount of financial assistance awarded and paid, 30 investments, terms and conditions contracted for and actually 31 completed under the agreements, and, if applicable, the number 32 of jobs created or retained. 33 -19- LSB 1648XS (3) 85 mm/sc 19/ 19