H.F. 2150 Section 1. NEW SECTION . 15E.185 Rural opportunity zones. 1 1. The authority shall designate a county of this state as 2 a rural opportunity zone if it meets the eligibility criteria 3 in section 15E.186. A county shall remain designated as a 4 rural opportunity zone until it loses its designation from 5 the authority. A county may lose its designation as a rural 6 opportunity zone if events subsequent to its designation cause 7 it to no longer meet the criteria specified in section 15E.186. 8 However, a county shall not lose its designation as a rural 9 opportunity zone during its participation in the student loan 10 repayment program under section 15E.188. 11 2. A county may apply to the authority for designation as a 12 rural opportunity zone. The application shall be made by the 13 county board of supervisors in the form and manner prescribed 14 by the authority. The authority shall consider each county for 15 designation as a rural opportunity zone, even if the county 16 does not submit an application. 17 3. The authority shall review the eligibility of each county 18 in this state as a rural opportunity zone at least annually. 19 Sec. 2. NEW SECTION . 15E.186 Rural opportunity zone 20 eligibility criteria. 21 A county may be designated by the authority as a rural 22 opportunity zone if it meets at least two of the following 23 criteria: 24 1. The county has an average weekly wage that ranks among 25 the bottom twenty-five counties in the state based on the 2010 26 annual average weekly wage for employees in private business. 27 2. The county has a per capita income of twelve thousand six 28 hundred forty-eight dollars or less based on the 2010 certified 29 federal census. 30 3. The county has a family poverty rate of twelve percent or 31 higher based on the 2010 certified federal census. 32 4. The county has a family poverty rate that ranks among 33 the top twenty-five counties in the state based on the 2010 34 certified federal census. 35 -1- LSB 5605YH (2) 86 mm/sc 1/ 10

H.F. 2150 5. The county has experienced a percentage population 1 loss that ranks among the top twenty-five counties in the 2 state between 2005 and 2010. For purposes of this subsection, 3 prison population shall be excluded in the population loss 4 calculations. 5 6. The county has a percentage of persons sixty-five years 6 of age or older that ranks among the top twenty-five counties 7 in the state based on the 2010 certified federal census. 8 7. Ten percent or more of the housing units in the county 9 are vacant. 10 8. The average valuation for each class of property in the 11 county is seventy-five percent or less of the statewide average 12 for that classification based upon the most recent valuations 13 for property tax purposes. 14 9. A recent business closure or permanent layoff has 15 occurred in the county. The business closure or permanent 16 layoff must involve the loss of full-time employees, not 17 including retail employees, at one place of business totaling 18 at least one thousand employees or four percent or more of 19 the county’s resident labor force based on the most recent 20 annual resident labor force statistics from the department of 21 workforce development, whichever is lower. A permanent layoff 22 does not include a layoff of seasonal employees or a layoff 23 that is seasonal in nature. For purposes of this paragraph, 24 “permanent layoff” means the loss of jobs to an out-of-state 25 location, the cessation of one or more production lines, the 26 removal of manufacturing machinery and equipment, or similar 27 actions determined to be equivalent in nature by the authority. 28 For purposes of this subsection, a permanent layoff must occur 29 on or after the effective date of this Act. 30 Sec. 3. NEW SECTION . 15E.187 Student loan repayment program 31 fund. 32 A student loan repayment program fund is created in the 33 state treasury under the control of the authority. The fund 34 shall consist of all moneys appropriated to it by the general 35 -2- LSB 5605YH (2) 86 mm/sc 2/ 10

H.F. 2150 assembly. The moneys in the fund are not subject to the 1 provisions of section 8.33 and shall not be transferred, used, 2 obligated, appropriated, or otherwise encumbered except as 3 provided in section 15E.188. Notwithstanding section 12C.7, 4 subsection 2, earnings or interest on moneys appropriated 5 pursuant to this section shall be retained by the fund and used 6 for the purposes designated until expended. 7 Sec. 4. NEW SECTION . 15E.188 Student loan repayment 8 program. 9 1. For purposes of this section, unless the context 10 otherwise requires: 11 a. “Institution of higher education” means the same as 12 defined in section 12D.1. 13 b. “Outstanding student loan debt” means the student loan 14 debt balance of a participating individual at the time of 15 enrollment in the program, which debt was incurred by the 16 participating individual for attendance at an institution of 17 higher education where such participating individual earned 18 credits toward an associate, bachelor, or postgraduate degree. 19 c. “Participating county” means a county which has adopted a 20 resolution creating a county component in the program pursuant 21 to subsection 4. 22 d. “Participating individual” means an individual who meets 23 the eligibility requirements in subsection 3, paragraph “a” , 24 for participation in the program, and who has enrolled in the 25 program. 26 e. “Program” means the student loan repayment program 27 established pursuant to this section. 28 2. There is established a student loan repayment program 29 within the authority. The program shall consist of a county 30 component for each participating county and a matching 31 component of the authority for the purpose of providing student 32 loan repayment assistance on the outstanding student loan debt 33 of participating individuals. 34 3. A county designated as a rural opportunity zone pursuant 35 -3- LSB 5605YH (2) 86 mm/sc 3/ 10

H.F. 2150 to sections 15E.185 and 15E.186 may participate in the program 1 if it creates and implements a county component. A county 2 component shall contain uniform terms and conditions prescribed 3 by the authority, and shall meet the following minimum 4 qualifications: 5 a. The county component shall apply only to resident 6 individuals who have earned an associate, bachelor, or 7 postgraduate degree from an institution of higher education, 8 who have outstanding student loan debt, and who establish 9 domicile in the applicable county on or after the county adopts 10 a resolution creating a county component pursuant to subsection 11 4, and prior to July 1, 2021. 12 b. The county component shall provide that participating 13 individuals are entitled to full participation in the county 14 component for five years, provided the participating individual 15 remains domiciled within that county for the entire five-year 16 period. A participating individual who establishes domicile 17 outside of the county for which the individual first qualified 18 is ineligible to continue participation in the program. 19 c. The county, through its county component, shall agree to 20 repay, subject to the availability of matching payments by the 21 authority in subsection 6, over a five-year period, the lesser 22 of ten percent of the outstanding student loan debt of the 23 participating individual or seven thousand five hundred dollars 24 of the outstanding student loan debt of the participating 25 individual. A participating individual must remain domiciled 26 in the applicable county for an entire calendar year to receive 27 repayment assistance for that year. 28 4. A county that creates and implements a county component 29 must provide to the authority a duly adopted resolution from 30 its board of supervisors on or before January 1, 2017. The 31 resolution shall be irrevocable and shall obligate the county 32 to participate in the program for a period of five years for 33 each participating individual. 34 5. A participating individual shall enroll in both the 35 -4- LSB 5605YH (2) 86 mm/sc 4/ 10

H.F. 2150 county component and the matching component of this program in 1 the form and manner prescribed by the authority. 2 6. a. The authority shall, subject to the availability 3 of moneys in the student loan repayment program fund, match 4 repayments made by a participating county under its county 5 component for each participating individual up to the maximum 6 repayment assistance amount specified in subsection 3, 7 paragraph “c” , for that individual. 8 b. Annual repayments of outstanding student loan debt by a 9 participating county under its county component of the program, 10 and matching repayments by the authority under the matching 11 component of the program shall be made following the close of 12 a calendar year and following the participating individual’s 13 certification by the authority and the applicable county 14 that the participating individual is entitled to repayment 15 assistance pursuant to the program. Repayments will be made 16 directly to the lender of the participating individual’s 17 outstanding student loan debt. 18 c. The maximum aggregate amount that any participating 19 individual may receive from the county component and matching 20 component of this program shall not exceed the lesser of 21 twenty percent of the outstanding student loan debt of the 22 participating individual or fifteen thousand dollars of the 23 outstanding student loan debt of the participating individual. 24 d. Repayment assistance from the authority under the 25 matching component of this program is subject to the 26 availability of moneys in the student loan repayment program 27 fund. Nothing in this section guarantees a participating 28 individual a right to receive benefits provided in this 29 section. A county may provide repayment assistance under 30 its county component even if insufficient funds exist for 31 the authority to provide matching funds under the matching 32 component. 33 7. The authority shall adopt rules under chapter 17A 34 relating to the administration of this section. 35 -5- LSB 5605YH (2) 86 mm/sc 5/ 10

H.F. 2150 Sec. 5. NEW SECTION . 15E.189 Future repeal. 1 This division is repealed July 1, 2027. 2 Sec. 6. NEW SECTION . 422.10A Rural opportunity zone tax 3 credit. 4 1. As used in this section, unless the context otherwise 5 requires, “rural opportunity zone” means any county designated 6 by the economic development authority as a rural opportunity 7 zone pursuant to sections 15E.185 and 15E.186. 8 2. The taxes imposed under this division, less the credits 9 allowed under section 422.12, shall be reduced by a rural 10 opportunity zone tax credit. To be eligible for the credit, 11 the taxpayer must meet all of the following requirements: 12 a. The taxpayer must be a resident individual who was 13 domiciled in a rural opportunity zone in this state during 14 the entire tax year. A taxpayer domiciled in a county that 15 has lost its designation as a rural opportunity zone shall be 16 considered to be domiciled in a rural opportunity zone, so long 17 as the taxpayer established domicile in that county while the 18 county was designated as a rural opportunity zone. 19 b. The taxpayer established domicile in a rural opportunity 20 zone on or after July 1, 2016, and prior to January 1, 2021. 21 c. The taxpayer was domiciled outside of this state for five 22 or more years immediately prior to establishing domicile in a 23 rural opportunity zone. 24 d. The taxpayer had Iowa source net income of less than ten 25 thousand dollars in each of the five years immediately prior to 26 establishing domicile in a rural opportunity zone. 27 e. The taxpayer’s tax return on which the credit is claimed 28 is timely filed, including any extension of time to file. 29 f. The taxpayer is not currently delinquent in filing 30 any tax return with this state nor does the taxpayer have 31 delinquent accounts, charges, fees, loans, taxes, or other 32 indebtedness owed to this state or a political subdivision of 33 this state. 34 3. a. The credit shall be an amount equal to the taxpayer’s 35 -6- LSB 5605YH (2) 86 mm/sc 6/ 10

H.F. 2150 income tax payable to this state under this division, computed 1 without regard to the credit allowed under this section, and 2 the credits for withheld tax and for estimated tax paid under 3 section 422.16. 4 b. The maximum amount that may be refunded to a taxpayer 5 in any tax year the credit allowed under this section is 6 claimed shall not exceed the sum of the amount withheld from 7 the taxpayer’s wages or other income pursuant to section 8 422.16, subsection 1, for the tax year, plus the amount paid 9 as estimated tax by the taxpayer pursuant to section 422.16, 10 subsection 11, for the tax year. 11 c. A taxpayer may claim the credit allowed under this 12 section for not more than five consecutive tax years following 13 establishment of the taxpayer’s domicile in a rural opportunity 14 zone pursuant to subsection 2, paragraph “b” . 15 4. This section is repealed July 1, 2026. 16 Sec. 7. APPLICABILITY. The following provision or 17 provisions of this Act apply to tax years beginning on or after 18 January 1, 2017, and ending on or before December 31, 2025: 19 1. The section of this Act enacting section 422.10A. 20 EXPLANATION 21 The inclusion of this explanation does not constitute agreement with 22 the explanation’s substance by the members of the general assembly. 23 This bill relates to economic development by creating rural 24 opportunity zones within this state, a student loan repayment 25 program and fund, and an individual income tax credit. 26 RURAL OPPORTUNITY ZONES. The bill provides that the 27 economic development authority (authority) shall designate 28 counties of this state as rural opportunity zones if they meet 29 certain criteria specified in the bill. A county may apply to 30 the authority for designation as a rural opportunity zone, but 31 application is not required for designation by the authority. 32 Once designated as a rural opportunity zone, a county may lose 33 its designation if events subsequent to its designation cause 34 it to no longer meet the specified criteria. However, a county 35 -7- LSB 5605YH (2) 86 mm/sc 7/ 10

H.F. 2150 shall not lose its designation as a rural opportunity zone 1 during the county’s participation in the student loan repayment 2 program described in the bill. The authority is required to 3 review the eligibility of each county in this state as a rural 4 opportunity zone at least annually. 5 A county is eligible to be designated as a rural opportunity 6 zone if it meets at least two of nine criteria specified in 7 the bill relating to per capita income, average weekly wages, 8 family poverty rate, population loss, aging population, housing 9 vacancies, property valuations, or recent business closures or 10 permanent layoffs. 11 Rural opportunity zone designations are repealed July 1, 12 2027. 13 STUDENT LOAN REPAYMENT PROGRAM. The bill creates a student 14 loan repayment program within the authority for the purpose of 15 providing student loan repayment assistance on the outstanding 16 student loan debt of certain individuals. The program consists 17 of a county component for each participating county and a 18 matching component of the state. Qualifying individuals may 19 enroll in both the county component and the matching component 20 of the student loan repayment program. 21 Each county designated by the authority as a rural 22 opportunity zone is eligible to create and implement a 23 county component within the student loan repayment program. 24 Each county component is required to contain uniform terms 25 and conditions prescribed by the authority and shall have 26 certain minimum qualifications. First, the county component 27 shall apply only to resident individuals who have earned 28 an associate, bachelor, or postgraduate degree, who have 29 outstanding student loan debt, and who establish domicile in 30 that county on or after the county creates the county component 31 of the program, and prior to July 1, 2021. Second, the county 32 component shall provide that participating individuals are 33 entitled to full participation in the county component for five 34 years, provided the participating individual remains domiciled 35 -8- LSB 5605YH (2) 86 mm/sc 8/ 10

H.F. 2150 within that county for the entire five-year period. Third, 1 the county component shall agree to repay, subject to matching 2 payments by the authority over a five-year period, the lesser 3 of 10 percent of the outstanding student loan debt of the 4 participating individual, or $7,500 of the outstanding student 5 loan debt of the participating individual. A participating 6 individual must remain domiciled in the applicable county for 7 the entirety of a calendar year to receive repayment assistance 8 for that year. After a county creates and implements its 9 county component, it is required to provide a duly adopted 10 resolution to the authority by January 1, 2017. The resolution 11 shall be irrevocable and shall obligate the county to 12 participate in the program for a period of five years per 13 individual. 14 Participating individuals who remain domiciled in that 15 county are eligible to receive repayment assistance from 16 the county component. In addition, the authority, through 17 the matching component, shall match each payment made under 18 the county component up to the lesser of 10 percent of the 19 outstanding student loan debt, or $7,500 of the outstanding 20 student loan debt. The maximum amount of repayment assistance 21 that an individual may receive under the program shall not 22 exceed the lesser of 20 percent of the outstanding student loan 23 debt or $15,000. 24 Matching payments from the authority shall be made from 25 a student loan repayment program fund created in the bill 26 and are subject to the availability of moneys in the fund. 27 Participating individuals are not guaranteed a right to receive 28 repayment assistance under the program. A county may, but is 29 not required, to provide repayment assistance under its county 30 component even if insufficient funds exist for the authority to 31 provide matching funds. The student loan repayment program is 32 repealed July 1, 2027. 33 INCOME TAX CREDIT. The bill provides an individual 34 income tax credit for taxpayers who are domiciled in a rural 35 -9- LSB 5605YH (2) 86 mm/sc 9/ 10

H.F. 2150 opportunity zone. To be eligible for the credit, the taxpayer 1 must meet seven requirements. First, the taxpayer must be 2 a resident individual. Second, the taxpayer must have been 3 domiciled in a rural opportunity zone for the entire tax 4 year. Third, the taxpayer must have established domicile in a 5 rural opportunity zone on or after July 1, 2016, and prior to 6 January 1, 2021. Fourth, the taxpayer must have been domiciled 7 outside this state for five or more years immediately prior 8 to establishing domicile in a rural opportunity zone. Fifth, 9 the taxpayer must have had Iowa source net income of less 10 than $10,000 in each of the five years immediately prior to 11 establishing domicile in a rural opportunity zone. Sixth, the 12 taxpayer’s tax return on which the rural opportunity zone tax 13 credit is claimed is timely filed, including any extension of 14 time to file. Seventh, the taxpayer must not be delinquent in 15 filing any tax return with this state or have any indebtedness 16 owed to the state or a political subdivision of the state. 17 The tax credit is equal to the taxpayer’s total individual 18 income tax owed to the state, computed without regard to 19 reductions for the rural opportunity zone credit, withholding 20 on the taxpayer’s wages or other income, and any estimated tax 21 payments made by the individual. The maximum amount that may 22 be refunded to a taxpayer in any year the rural opportunity 23 zone tax credit is allowed shall not exceed the sum of the 24 taxpayer’s withholding on wages or other income for that year, 25 plus the estimated tax payments made for that year. 26 The tax credit is allowed for five consecutive years 27 following the year the taxpayer first establishes domicile in a 28 rural opportunity zone. The rural opportunity zone tax credit 29 applies to tax years beginning on or after January 1, 2017, 30 and ending on or before December 31, 2025. The tax credit is 31 repealed July 1, 2026. 32 -10- LSB 5605YH (2) 86 mm/sc 10/ 10