Senate File 409 - Introduced SENATE FILE 409 BY COMMITTEE ON ECONOMIC GROWTH (SUCCESSOR TO SSB 1075) A BILL FOR An Act relating to the economic development financial 1 assistance duties and powers of the economic development 2 authority by authorizing and creating fees, affecting the 3 aggregate tax credit limit for certain economic development 4 programs, making an appropriation, and including effective 5 date and retroactive applicability provisions. 6 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 7 TLSB 1207SV (3) 85 mm/rj

S.F. 409 DIVISION I 1 COLLECTION OF FEES 2 Section 1. Section 12.10, Code 2013, is amended to read as 3 follows: 4 12.10 Deposits by state officers. 5 Except as otherwise provided, all elective and appointive 6 state officers, boards, commissions, and departments shall, 7 within ten days succeeding the collection, deposit with the 8 treasurer of state, or to the credit of the treasurer of state 9 in any depository designated by the treasurer of state, ninety 10 percent of all fees, commissions, and moneys collected or 11 received. The balance actually collected in cash, remaining 12 in the hands of any officer, board, or department shall not 13 exceed the sum of five thousand dollars and money collected 14 shall not be held more than thirty days. This section does not 15 apply to the state fair board, the state board of regents, the 16 utilities board of the department of commerce, the director of 17 the department of human services, the Iowa finance authority , 18 the economic development authority, or to the funds received 19 by the state racing and gaming commission under sections 99D.7 20 and 99D.14 . 21 Sec. 2. Section 15.106B, Code 2013, is amended by adding the 22 following new subsection: 23 NEW SUBSECTION . 5. a. The authority may charge fees to 24 businesses or individuals who receive financial assistance 25 under chapter 15 or 15E. The amount of such fees shall be 26 determined based on the costs of the authority associated with 27 its performance of contract administration and compliance 28 duties relating to economic development programs. 29 b. The authority may charge businesses and individuals a fee 30 for the use of the authority’s federal EB-5 immigrant investor 31 regional center. 32 Sec. 3. Section 15.330, Code 2013, is amended by adding the 33 following new subsection: 34 NEW SUBSECTION . 12. a. The imposition of a one-time 35 -1- LSB 1207SV (3) 85 mm/rj 1/ 6

S.F. 409 compliance cost fee of five hundred dollars to be collected 1 by the authority prior to the issuance of a tax incentive 2 certificate or the disbursement of financial assistance. 3 b. The imposition of a compliance cost fee equal to one-half 4 of one percent of the value of tax incentives claimed pursuant 5 to an agreement that has an aggregate tax incentive value of 6 one hundred thousand dollars or greater. The authority shall 7 collect the fee from the business after the tax incentive is 8 claimed by the business from the department of revenue. 9 Sec. 4. NEW SECTION . 15E.198 Compliance cost fees. 10 The compliance cost fees imposed in 15.330, subsection 12, 11 shall apply to all agreements entered into under this division 12 and shall be collected by the authority in the same manner and 13 to the same extent as described in that subsection. 14 Sec. 5. EFFECTIVE UPON ENACTMENT. This division of this 15 Act, being deemed of immediate importance, takes effect upon 16 enactment. 17 Sec. 6. APPLICABILITY. This division of this Act applies to 18 agreements entered into on or after the effective date of this 19 division of this Act. 20 DIVISION II 21 AGGREGATE TAX CREDIT LIMITATION 22 Sec. 7. Section 15.119, subsection 1, Code 2013, is amended 23 to read as follows: 24 1. a. Notwithstanding any provision to the contrary in 25 any of the programs listed in subsection 2 , the authority, 26 except as provided in paragraph “b” , shall not authorize for 27 any one fiscal year an amount of tax credits for the programs 28 specified in subsection 2 that is in excess of one hundred 29 twenty eighty-five million dollars. 30 b. (1) The authority may authorize an amount of tax credits 31 during a fiscal year that is in excess of the amount specified 32 in paragraph “a” , but the amount of such excess shall be counted 33 against the total amount of tax credits that may be authorized 34 for the next fiscal year. 35 -2- LSB 1207SV (3) 85 mm/rj 2/ 6

S.F. 409 (2) Any amount of tax credits authorized and awarded during 1 a fiscal year for a program specified in subsection 2 which are 2 irrevocably declined by the awarded business on or before June 3 30 of the next fiscal year may be reallocated, authorized, and 4 awarded during the fiscal year in which the declination occurs. 5 Tax credits authorized pursuant to this subparagraph shall not 6 be considered for purposes of subparagraph (1). 7 Sec. 8. Section 15.119, subsection 2, paragraphs d and e, 8 Code 2013, are amended to read as follows: 9 d. The tax credits for investments in qualifying businesses 10 and community-based seed capital funds issued pursuant to 11 section 15E.43 . In allocating tax credits pursuant to this 12 subsection , the authority shall allocate two million dollars 13 for purposes of this paragraph , unless the authority determines 14 that the tax credits awarded will be less than that amount . 15 e. The tax credits for investments in an innovation fund 16 pursuant to section 15E.52 . In allocating tax credits pursuant 17 to this subsection , the authority shall allocate eight million 18 dollars for purposes of this paragraph , unless the authority 19 determines that the tax credits awarded will be less than that 20 amount . 21 Sec. 9. Section 15.119, subsection 3, Code 2013, is amended 22 to read as follows: 23 3. In allocating the amount of tax credits authorized 24 pursuant to subsection 1 among the programs specified in 25 subsection 2 , the authority shall not allocate more than five 26 at least ten million dollars for purposes of subsection 2 , 27 paragraph “f” . 28 Sec. 10. EFFECTIVE UPON ENACTMENT. This division of this 29 Act, being deemed of immediate importance, takes effect upon 30 enactment. 31 Sec. 11. RETROACTIVE APPLICABILITY. This division of this 32 Act applies retroactively to July 1, 2012. 33 DIVISION III 34 CITY DEVELOPMENT BOARD FEES 35 -3- LSB 1207SV (3) 85 mm/rj 3/ 6

S.F. 409 Sec. 12. Section 368.10, Code 2013, is amended to read as 1 follows: 2 368.10 Rules —— establishment of filing fees. 3 The board may establish rules for the performance of its 4 duties and the conduct of proceedings before it. The rules 5 may include establishing filing fees for applications and 6 petitions submitted to the board. The amounts collected 7 from the establishment of such fees are appropriated to the 8 board for the purpose of reimbursing the economic development 9 authority for the budgeted costs of covering the board’s 10 expenses as described in section 368.9, subsection 1. Any 11 amounts collected in a fiscal year by the board in excess of 12 such budgeted costs shall be deposited in the general fund of 13 the state. The board’s rules are subject to chapter 17A , as 14 applicable. 15 EXPLANATION 16 This bill relates to the financial management of the 17 economic development authority (EDA) by authorizing and 18 creating fees, affecting the aggregate tax credit limit 19 for certain economic development programs, and by making an 20 appropriation. 21 COLLECTION OF FEES. Division I amends Code section 22 15.106B, relating to the program powers of the EDA, to allow 23 for the imposition and collection of fees from businesses or 24 individuals who receive financial assistance from the EDA under 25 Code chapter 15 or 15E. The fee amounts are to be determined 26 based on the EDA’s costs of administering contracts under its 27 various economic development programs. The division also 28 allows the EDA to charge a fee for the use of its federal EB-5 29 immigrant investor regional center. Code section 12.10 is 30 amended to allow the EDA to retain the fees it collects by 31 adding the EDA to the list of departments exempted from the 32 requirement to deposit all collected fees with the treasurer of 33 state. 34 The division creates two compliance cost fees to be imposed 35 -4- LSB 1207SV (3) 85 mm/rj 4/ 6

S.F. 409 on all persons or entities that enter into an agreement with 1 the EDA under its high quality jobs program or enterprise zone 2 program. First, a one-time compliance cost fee of $500 due 3 prior to the issuance of a tax incentive certificate or the 4 disbursement of financial assistance. Second, a compliance 5 cost fee equal to 0.5 percent of the value of tax incentives 6 claimed under any agreement that has an aggregate tax incentive 7 value of $100,000 or greater, which fee is due after a tax 8 incentive is claimed from the department of revenue. 9 The division takes effect upon enactment and applies to 10 agreements entered into on or after the effective date of the 11 division. 12 AGGREGATE TAX CREDIT LIMITATION. Division II increases 13 the aggregate tax credit limit on EDA programs listed in 14 Code section 15.119 from $120 million per fiscal year to 15 $185 million per fiscal year. The division allows the EDA 16 to reallocate, authorize, and award for a fiscal year any 17 amount of tax credits that were previously awarded by the EDA, 18 provided the tax credit is irrevocably declined by the awarded 19 business before the close of the fiscal year which follows the 20 fiscal year in which it was awarded. Any amount of tax credits 21 reallocated, authorized, and awarded under this provision shall 22 not be included in the calculation of the aggregate tax credit 23 limit for the fiscal year. 24 The division amends the requirement that not more than 25 $5 million in tax credits be allocated to the redevelopment 26 tax credit program for brownfields and grayfields to require 27 that at least $10 million in tax credits be allocated to the 28 program. 29 The division amends the requirements that $2 million and $8 30 million in tax credits be allocated to the qualifying business 31 and community-based seed capital funds investment tax credits 32 and the innovation fund tax credit, respectively, to allow 33 the EDA to allocate a lesser amount if it determines the tax 34 credits awarded for that fiscal year will be lower. 35 -5- LSB 1207SV (3) 85 mm/rj 5/ 6

S.F. 409 The division takes effect upon enactment and applies 1 retroactively to July 1, 2012. 2 CITY DEVELOPMENT BOARD FEES. Under current law, the EDA 3 is required to provide office space and staff assistance to 4 the city development board created in Code section 368.9, 5 and to budget funds to cover expenses of the board. Also 6 under current law, the city development board is allowed to 7 impose fees upon applications and petitions submitted to the 8 board. Division III appropriates the amounts collected from 9 those fees to the city development board for the purpose of 10 reimbursing the EDA for the budgeted costs of covering the 11 board’s expenses. Any fees collected in a fiscal year by the 12 city development board in excess of such budgeted costs shall 13 be deposited in the general fund of the state. 14 -6- LSB 1207SV (3) 85 mm/rj 6/ 6