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

S.F. _____ H.F. _____ to read as follows: 1 2. The repayment of incentives or financial assistance 2 by the business if the business does not meet any of the 3 requirements of this part or the resulting agreement. The 4 repayment of incentives pursuant to this subsection shall be 5 considered a tax payment due and payable to the department of 6 revenue by any taxpayer who has claimed such incentives, and 7 the failure to make such a repayment may be treated by the 8 department of revenue in the same manner as a failure to pay 9 the tax shown due or required to be shown due with the filing of 10 a return or deposit form. In addition, the county shall have 11 the authority to take action to recover the value of property 12 taxes not collected as a result of the exemption provided to 13 the business under this part. 14 Sec. 5. Section 15.333, subsection 1, Code 2013, is amended 15 to read as follows: 16 1. An eligible business may claim a tax credit equal 17 to a percentage of the new investment directly related to 18 new jobs created or retained by the location or expansion 19 of an eligible business under the program. The tax credit 20 shall be amortized equally over five calendar years over the 21 period of time determined by the authority and specified in 22 the agreement entered into pursuant to section 15.330. The 23 tax credit may be amortized in amounts negotiated with the 24 authority . The tax credit shall be allowed against taxes 25 imposed under chapter 422, division II, III, or V , and against 26 the moneys and credits tax imposed in section 533.329 . If the 27 business is a partnership, S corporation, limited liability 28 company, cooperative organized under chapter 501 and filing 29 as a partnership for federal tax purposes, or estate or trust 30 electing to have the income taxed directly to the individual, 31 an individual may claim the tax credit allowed. The amount 32 claimed by the individual shall be based upon the pro rata 33 share of the individual’s earnings of the partnership, S 34 corporation, limited liability company, cooperative organized 35 -2- LSB 1206XD (4) 85 ad/sc 2/ 6

S.F. _____ H.F. _____ under chapter 501 and filing as a partnership for federal 1 tax purposes, or estate or trust. The percentage shall be 2 determined as provided in section 15.335A . Any tax credit in 3 excess of the tax liability for the tax year may be credited 4 to the tax liability for the following seven years or until 5 depleted, whichever occurs first. 6 DIVISION II 7 MICROENTERPRISES 8 Sec. 6. Section 15.102, subsections 5 and 9, Code 2013, are 9 amended by striking the subsections. 10 Sec. 7. REPEAL. Section 15.240, Code 2013, is repealed. 11 DIVISION III 12 BROADBAND ACCESS GOVERNING BOARD 13 Sec. 8. 2009 Iowa Acts, chapter 173, section 13, subsection 14 5, paragraphs b, c, and d, are amended by striking the 15 paragraphs. 16 DIVISION IV 17 INDUSTRIAL PROPERTY TAX EXEMPTION APPROVALS 18 Sec. 9. Section 427B.1, subsection 1, Code 2013, is amended 19 to read as follows: 20 1. A city council, or a county board of supervisors as 21 authorized by section 427B.2 , may provide by ordinance for 22 a partial exemption from property taxation of the actual 23 value added to industrial real estate by the new construction 24 of industrial real estate, research-service facilities, 25 warehouses, distribution centers and the acquisition of or 26 improvement to machinery and equipment assessed as real estate 27 pursuant to section 427A.1, subsection 1 , paragraph “e” . “New 28 construction” means new buildings and structures and includes 29 new buildings and structures which are constructed as additions 30 to existing buildings and structures. “New construction” does 31 not include reconstruction of an existing building or structure 32 which does not constitute complete replacement of an existing 33 building or structure or refitting of an existing building or 34 structure, unless the reconstruction of an existing building 35 -3- LSB 1206XD (4) 85 ad/sc 3/ 6

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

S.F. _____ H.F. _____ on the length of a contract for services entered into by the 1 authority. 2 Currently, a business is generally ineligible to receive 3 economic development assistance under the high quality jobs 4 program if the business has a record that tends to show 5 a consistent pattern of violations of the law, including 6 environmental and worker safety laws as well as violations 7 of related rules and regulations. The division adds that 8 a business is also ineligible for economic development 9 assistance if the business engages in a pattern of antitrust 10 violations or if a business’s conduct in violating any laws, 11 including environmental, worker safety, and antitrust laws is 12 intentional, criminal, or reckless. 13 Current law requires that an agreement under the high 14 quality jobs program for assistance or incentives entered into 15 between the authority and a business include requirements for a 16 business’s eligibility for the incentives or assistance. The 17 bill adds that the agreement must also include the requirements 18 that a business receiving incentives or assistance must 19 maintain throughout the period of the agreement. The authority 20 must ensure that a business only receives the incentives or 21 assistance if the business meets the initial eligibility 22 requirements and maintains the program requirements throughout 23 the agreement period. 24 Current law also provides that an agreement under the high 25 quality jobs program must include the repayment of incentives 26 or assistance by a business if a business does not meet 27 the requirements in statute or the agreement. The division 28 provides that the repayment of incentives, in this context, is 29 a tax payment due and payable to the department of revenue by 30 a taxpayer, and the taxpayer’s failure to make the repayment 31 may be treated by the department of revenue in the same manner 32 as a failure to pay the tax shown or required to be shown 33 due when filing a return or deposit form. The division also 34 authorizes the county to recover property taxes exempted under 35 -5- LSB 1206XD (4) 85 ad/sc 5/ 6

S.F. _____ H.F. _____ the agreement. 1 Under current law, an eligible business under the high 2 quality jobs program may claim a tax credit equal to a 3 percentage of the new investment directly related to new jobs 4 created or retained by a location expansion of the eligible 5 business. The tax credit is amortized equally over five 6 calendar years. The division amends this provision to allow 7 the authority and the eligible business to negotiate the amount 8 of amortization, and the length of the amortization period 9 would be described in the agreement entered into between the 10 authority and the eligible business. 11 Division II of the bill eliminates the community 12 microenterprise development organization grant program. 13 Division III of the bill eliminates the broadband access 14 governing board created in 2009 Iowa Acts. The governing 15 board was tasked with establishing a comprehensive plan for 16 the deployment and sustainability of high-speed broadband 17 access in areas capable of timely implementation of the 18 access, establishing a competitive process for the disbursement 19 of funds for such deployment and sustainability, making 20 recommendations to the general assembly, and establishing and 21 maintaining separate accounts for the use of certain proceeds. 22 Division IV of the bill relates to the economic development 23 authority’s approval of industrial property tax exemptions. 24 The division eliminates the requirement that the economic 25 development authority recommend prior approval of industrial 26 property tax exemptions by local governments. 27 -6- LSB 1206XD (4) 85 ad/sc 6/ 6