Senate File 2326 - Introduced SENATE FILE 2326 BY HART A BILL FOR An Act modifying the number and qualification of cities that 1 may participate in the targeted jobs withholding tax credit 2 program. 3 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 4 TLSB 6047XS (3) 85 mm/sc

S.F. 2326 Section 1. Section 403.19A, subsection 2, Code 2014, is 1 amended to read as follows: 2 2. a. An eligible city may apply for designation as a pilot 3 project city pursuant to this subsection . An eligible city is 4 a city that wholly contains three or more census tracts and is 5 located in a county meeting one of the following requirements: 6 (1) A county that borders Nebraska. 7 (2) A county that borders South Dakota. 8 (3) A county that borders a state other than Nebraska or 9 South Dakota. 10 (4) A county that borders Illinois. 11 b. (1) The department of economic development shall 12 approve four six eligible cities as pilot project cities, one 13 pursuant to paragraph “a” , subparagraph (1), one pursuant to 14 paragraph “a” , subparagraph (2), and two pursuant to paragraph 15 “a” , subparagraph (3) , and three pursuant to paragraph “a” , 16 subparagraph (4) . 17 (2) If For cities approved pursuant to paragraph “a” , 18 subparagraphs (1), (2), or (3), if two eligible cities are 19 approved which are located in the same county and the county 20 has a population of less than forty-five thousand, the two 21 approved eligible cities shall be considered one pilot project 22 city. If more than two cities meeting the requirements of 23 paragraph “a” , subparagraph (3), apply to be designated as 24 a pilot project city, the department of economic development 25 shall determine which two cities hold the most potential to 26 create new jobs or generate the greatest capital within their 27 areas. Applications from eligible cities seeking approval 28 under paragraph “a” , subparagraph (1), (2), or (3), filed on or 29 after October 1, 2006, shall not be considered. 30 (3) For cities approved pursuant to paragraph “a” , 31 subparagraph (4): 32 (a) One city shall have a population of at least twenty-six 33 thousand four hundred residents but not more than twenty-seven 34 thousand residents, which city shall be located in a county 35 -1- LSB 6047XS (3) 85 mm/sc 1/ 4

S.F. 2326 with a population of at least forty-eight thousand five hundred 1 residents but not more than fifty thousand residents, as 2 determined by the 2010 certified federal census. 3 (b) One city shall have a population of at least eighty-five 4 thousand six hundred residents but not more than one hundred 5 ten thousand residents, which city shall be located in a county 6 with a population of at least one hundred twenty thousand 7 residents but not more than one hundred seventy thousand 8 residents, as determined by the 2010 certified federal census. 9 (c) One city shall have a population of at least three 10 thousand six hundred residents but not more than five 11 thousand residents, which city shall be located in a county 12 with a population of at least one hundred twenty thousand 13 residents but not more than one hundred seventy thousand 14 residents, as determined by the 2010 certified federal census. 15 Notwithstanding the requirement in paragraph “a” that a city 16 wholly contain three or more census tracts, a city may be 17 approved pursuant to this subparagraph division regardless of 18 the number of census tracts the city contains. 19 (d) Applications from eligible cities seeking approval 20 under paragraph “a” , subparagraph (4), filed on or after January 21 1, 2015, shall not be considered. 22 (2) (4) If a pilot project city does not enter into a 23 withholding agreement within one year of its approval as a 24 pilot project city, the city shall lose its status as a pilot 25 project city. If two pilot project cities are located in the 26 same county, the loss of status by one pilot project city shall 27 not cause the second pilot project city in the county to lose 28 its status as a pilot project city. Upon such occurrence, the 29 department of economic development shall take applications from 30 other eligible cities to replace that city. Another city shall 31 be designated within six months. 32 (3) (5) On July 1, 2011, the economic development authority 33 shall assume responsibility for the administration of this 34 subsection . 35 -2- LSB 6047XS (3) 85 mm/sc 2/ 4

S.F. 2326 EXPLANATION 1 The inclusion of this explanation does not constitute agreement with 2 the explanation’s substance by the members of the general assembly. 3 This bill relates to the targeted jobs withholding tax 4 credit pilot project, which is a program that allows pilot 5 project cities to enter into withholding agreements with 6 businesses that meet certain job creation, capital investment, 7 and private financial support requirements within the city. 8 Withholding agreements provide for the diversion of a certain 9 percentage of the gross wages paid by the business to the pilot 10 project city for a project related to the employer pursuant to 11 the agreement. 12 Under current law, the program is restricted to four pilot 13 project cities; one in a county bordering Nebraska, one in a 14 county bordering South Dakota, and two in counties bordering 15 states other than Nebraska or South Dakota. However, a county 16 with a population of less than 45,000 residents may count 17 two cities as one pilot project city. The current pilot 18 project cities are Sioux City, Fort Madison, Council Bluffs, 19 Burlington, and Keokuk. 20 The bill amends the requirement that eligible cities contain 21 three or more census tracts to specify that eligible cities 22 wholly contain three or more census tracts. 23 The bill allows three additional eligible cities from 24 counties that border Illinois to be designated as pilot project 25 cities. In order to qualify, the following requirements must 26 be met: 27 1. One city must have a population of 26,400 to 27,000 28 residents, and must be located in a county with a population 29 of 48,500 to 50,000 residents. 30 2. One city must have a population of 85,600 to 110,000 31 residents and must be located in a county with a population of 32 120,000 to 170,000 residents. 33 3. One city must have a population of 3,600 to 5,000 34 residents and must be located in a county with a population of 35 -3- LSB 6047XS (3) 85 mm/sc 3/ 4

S.F. 2326 120,000 to 170,000 residents. A city may qualify under this 1 designation regardless of whether or not it wholly contains 2 three or more census tracts. 3 The bill allows applications from eligible cities for 4 designation as these pilot project cities to be filed before 5 January 1, 2015. 6 -4- LSB 6047XS (3) 85 mm/sc 4/ 4