S.F. _____ H.F. _____ DIVISION I 1 LIFE CYCLE COST ANALYSES 2 Section 1. Section 470.1, Code 2016, is amended by adding 3 the following new subsection: 4 NEW SUBSECTION . 01. “Addition” means new construction equal 5 to or greater than twenty thousand square feet of usable floor 6 space that is heated or cooled by a mechanical or electrical 7 system and is joined to an existing facility. 8 Sec. 2. Section 470.1, subsections 6, 7, and 10, Code 2016, 9 are amended to read as follows: 10 6. “Facility” means a building having twenty thousand square 11 feet or more of usable floor space that is heated or cooled 12 by a mechanical or electrical system or any building, system, 13 or physical operation which consumes more than forty thousand 14 British thermal units (BTUs) per square foot per year . 15 7. “Initial cost” means the moneys required for the capital 16 construction or renovation of a facility or the construction 17 of an addition . 18 10. “Renovation” means a project where additions or 19 alterations , that are not additions, to an existing facility 20 exceed fifty percent of the value of a facility and will affect 21 an energy system. 22 Sec. 3. Section 470.2, Code 2016, is amended to read as 23 follows: 24 470.2 Policy —— analysis required. 25 The general assembly declares that energy management is of 26 primary importance in the design of publicly owned facilities. 27 Commencing January 1, 1980 On or after the effective date of 28 this division of this Act , a public agency responsible for the 29 construction or renovation of a facility or the construction of 30 an addition shall, in a design begun after that date, include 31 as a design criterion the requirement that a life cycle cost 32 analysis be conducted for the facility. The objectives of the 33 life cycle cost analysis are to optimize energy efficiency at 34 an acceptable life cycle cost. The life cycle cost analysis 35 -1- LSB 5171XD (9) 86 aw/sc 1/ 9

S.F. _____ H.F. _____ shall meet the requirements of section 470.3 . 1 Sec. 4. Section 470.3, subsection 2, Code 2016, is amended 2 to read as follows: 3 2. A public agency or a person preparing a life cycle cost 4 analysis for a public agency shall consider the methods and 5 analytical models provided by the authority and available 6 through the commissioner, which are suited to the purpose 7 for which the project is intended. Within sixty days of 8 final selection of a design architect or engineer, a public 9 agency, which is also a state agency under section 7D.34 , shall 10 notify the commissioner and the authority of the methodology 11 to be used to perform the life cycle cost analysis, on forms 12 provided by the authority use the methodology set forth in the 13 guidelines established, by rule, by the commissioner . 14 Sec. 5. Section 470.4, Code 2016, is amended to read as 15 follows: 16 470.4 Analysis approved. 17 The life cycle cost analysis shall be approved by the public 18 agency before contracts for the construction or renovation 19 of a facility or the construction of an addition are let. A 20 public agency may accept a facility design and shall meet 21 the requirements of this chapter if the design meets the 22 operational requirements of the agency and provides the optimum 23 life cycle cost. The public agency shall retain a copy of the 24 life cycle cost analysis and a statement justifying a design 25 decision both of which shall be available for public inspection 26 at reasonable hours. 27 Sec. 6. Section 470.6, Code 2016, is amended to read as 28 follows: 29 470.6 Restriction on use of public funds. 30 Public funds shall not be used for the construction or 31 renovation of a facility or the construction of an addition 32 unless the design for the work is prepared in accordance with 33 this chapter and the actual construction or renovation of 34 the facility or the construction of the addition meets the 35 -2- LSB 5171XD (9) 86 aw/sc 2/ 9

S.F. _____ H.F. _____ requirements of the design. 1 Sec. 7. Section 470.7, Code 2016, is amended to read as 2 follows: 3 470.7 Life cycle cost analysis —— approval. 4 1. The public agency responsible for the new construction 5 or renovation of a public facility or the construction of an 6 addition to a public facility shall submit a copy of the life 7 cycle cost analysis for review by the commissioner who shall 8 consult with the authority. If the public agency is also a 9 state agency under section 7D.34 , comments by the authority 10 or the commissioner, including any recommendation for changes 11 in the analysis, shall, within thirty days of receipt of the 12 analysis, be forwarded in writing to the public agency. If 13 either the authority or the commissioner disagrees with any 14 aspects of the life cycle cost analysis, the public agency 15 affected shall timely respond in writing to the commissioner 16 and the authority. The response shall indicate whether the 17 agency intends to implement the recommendations and, if the 18 agency does not intend to implement them, the public agency 19 shall present its reasons. The reasons may include but are 20 not limited to a description of the purpose of the facility or 21 renovation, preservation of historical architectural features, 22 architectural and site considerations, and health and safety 23 concerns. 24 2. Within thirty days of receipt of the response of the 25 public agency affected, the authority, the commissioner, or 26 both, shall notify in writing the public agency affected of 27 the authority’s, the commissioner’s, or both’s agreement 28 or disagreement with the response. In the event of a 29 disagreement, the authority, the commissioner, or both, shall 30 at the same time transmit the notification of disagreement 31 with response and related papers to the executive council 32 for resolution pursuant to section 7D.34 . The life cycle 33 cost analysis process, including submittal and approval, and 34 implementation exemption requests pursuant to section 470.8 , 35 -3- LSB 5171XD (9) 86 aw/sc 3/ 9

S.F. _____ H.F. _____ shall be completed prior to the letting of contracts for the 1 construction or renovation of a facility or the construction 2 of an addition . 3 Sec. 8. Section 470.8, Code 2016, is amended to read as 4 follows: 5 470.8 Life cycle cost analysis —— implementation and 6 exemptions. 7 1. The public agency responsible for the new construction 8 or renovation of a public facility or the construction of an 9 addition shall implement the recommendations of the life cycle 10 cost analysis. 11 2. The commissioner shall adopt rules for the 12 implementation and administration of the life cycle cost 13 analysis. The commissioner, in consultation with the director, 14 shall, by rule, develop criteria to exempt facilities from 15 the implementation requirements of this section . Using the 16 criteria, the commissioner, in cooperation with the director, 17 shall exempt facilities on a case by case case-by-case basis. 18 Factors to be considered when developing the exemption criteria 19 shall include, but not be limited to, a description of the 20 purpose of the facility or renovation, the preservation 21 of historical architectural features, site considerations, 22 and health and safety concerns. The commissioner and the 23 director shall grant or deny a request for exemption from the 24 requirements of this section within thirty days of receipt of 25 the request. 26 Sec. 9. EFFECTIVE UPON ENACTMENT. This division of this 27 Act, being deemed of immediate importance, takes effect upon 28 enactment. 29 DIVISION II 30 HIGH QUALITY JOBS PROGRAM —— DEFINITION 31 Sec. 10. Section 15.333, subsection 2, unnumbered paragraph 32 1, Code 2016, is amended to read as follows: 33 For purposes of this section , “new investment directly 34 related to new jobs created by the project” investment” means the 35 -4- LSB 5171XD (9) 86 aw/sc 4/ 9

S.F. _____ H.F. _____ cost of machinery and equipment, as defined in section 427A.1, 1 subsection 1 , paragraphs “e” and “j” , purchased for use in the 2 operation of the eligible business, the purchase price of which 3 has been depreciated in accordance with generally accepted 4 accounting principles, the purchase price of real property and 5 any buildings and structures located on the real property, and 6 the cost of improvements made to real property which is used 7 in the operation of the eligible business. “New investment 8 directly related to new jobs created by the project” investment” 9 also means the annual base rent paid to a third-party developer 10 by an eligible business for a period not to exceed ten years, 11 provided the cumulative cost of the base rent payments for that 12 period does not exceed the cost of the land and the third-party 13 developer’s costs to build or renovate the building for the 14 eligible business. The eligible business shall enter into a 15 lease agreement with the third-party developer for a minimum 16 of five years. If, however, within five years of purchase, 17 the eligible business sells, disposes of, razes, or otherwise 18 renders unusable all or a part of the land, buildings, or other 19 existing structures for which tax credit was claimed under this 20 section , the tax liability of the eligible business for the 21 year in which all or part of the property is sold, disposed of, 22 razed, or otherwise rendered unusable shall be increased by one 23 of the following amounts: 24 Sec. 11. Section 15.333A, subsection 2, unnumbered 25 paragraph 1, Code 2016, is amended to read as follows: 26 For purposes of this section , “new investment directly 27 related to new jobs created by the project” investment” means the 28 cost of machinery and equipment, as defined in section 427A.1, 29 subsection 1 , paragraphs “e” and “j” , purchased for use in the 30 operation of the eligible business, the purchase price of which 31 has been depreciated in accordance with generally accepted 32 accounting principles, the purchase price of real property and 33 any buildings and structures located on the real property, and 34 the cost of improvements made to real property which is used 35 -5- LSB 5171XD (9) 86 aw/sc 5/ 9

S.F. _____ H.F. _____ in the operation of the eligible business. “New investment 1 directly related to new jobs created by the project” investment” 2 also means the annual base rent paid to a third-party developer 3 by an eligible business for a period not to exceed ten years, 4 provided the cumulative cost of the base rent payments for that 5 period does not exceed the cost of the land and the third-party 6 developer’s costs to build or renovate the building for the 7 eligible business. The eligible business shall enter into a 8 lease agreement with the third-party developer for a minimum 9 of five years. If, however, within five years of purchase, 10 the eligible business sells, disposes of, razes, or otherwise 11 renders unusable all or a part of the land, buildings, or other 12 existing structures for which tax credit was claimed under this 13 section , the tax liability of the eligible business for the 14 year in which all or part of the property is sold, disposed of, 15 razed, or otherwise rendered unusable shall be increased by one 16 of the following amounts: 17 DIVISION III 18 FEDERAL SMALL BUSINESS PROGRAMS —— AUTHORITY ASSISTANCE 19 Sec. 12. Section 15.411, subsection 4, paragraphs a, b, and 20 c, Code 2016, are amended to read as follows: 21 a. (1) The authority shall establish and administer an 22 outreach program for purposes of assisting businesses with 23 applications to the federal small business innovation research 24 and small business technology transfer programs. 25 (2) The goals of this assistance are to increase the number 26 of successful phase II small business innovation research grant 27 and contract proposals in the state, increase the amount of 28 such grant and contract funds awarded in the state, stimulate 29 subsequent investment by industry, venture capital, and other 30 sources, and encourage businesses to commercialize promising 31 technologies. 32 b. (1) In administering the program, the authority may 33 provide technical and financial assistance to businesses. 34 Financial assistance provided pursuant to this subsection 35 -6- LSB 5171XD (9) 86 aw/sc 6/ 9

S.F. _____ H.F. _____ shall may be awarded to a business in an amount not to exceed 1 twenty-five one hundred thousand dollars to for any single 2 business individual federal award under this subsection . 3 (2) The authority may require successful applicants to 4 repay the amount of financial assistance received, but shall 5 not require unsuccessful applicants to repay such assistance. 6 Any moneys repaid pursuant to this subsection may be used to 7 provide financial assistance to other applicants. 8 c. The authority may also provide financial assistance 9 for purposes of helping businesses meet the matching funds 10 requirements of the federal small business innovation research 11 and small business technology transfer programs. 12 DIVISION IV 13 ENTERPRISE ZONES 14 Sec. 13. 2014 Iowa Acts, chapter 1130, section 43, 15 subsection 1, is amended to read as follows: 16 1. On or after the effective date of this division of this 17 Act, a city or county shall not create an enterprise zone under 18 chapter 15E, division XVIII, or enter into a new agreement or 19 amend an existing agreement under chapter 15E, division XVIII. 20 A city or county and the economic development authority, with 21 the approval of the economic development authority board, may 22 amend an agreement for compliance reasons if the amendment 23 does not increase the amount of incentives awarded under the 24 agreement. 25 EXPLANATION 26 The inclusion of this explanation does not constitute agreement with 27 the explanation’s substance by the members of the general assembly. 28 This bill relates to the programs and duties of the 29 economic development authority by modifying life cycle cost 30 analysis provisions relating to public facilities, making 31 technical changes pertaining to the high quality jobs program, 32 modifying economic development authority (authority) assistance 33 provisions related to the federal small business innovation 34 research and small business technology transfer programs, and 35 -7- LSB 5171XD (9) 86 aw/sc 7/ 9

S.F. _____ H.F. _____ modifying provisions concerning enterprise zones. 1 Division I of the bill modifies provisions relating to the 2 life cycle analysis required of certain public facilities. 3 The division adds a definition of “addition” and modifies the 4 definitions of “facility” and “renovation” and requires a 5 public agency responsible for the construction or renovation 6 of a facility or the construction of an addition to a facility 7 to include the performance of a life cycle cost analysis as 8 a design criterion on or after the effective date of the 9 division. The division requires a public agency or person 10 preparing a life cycle cost analysis for a public agency to 11 use methodology established, by rule, by the state building 12 code commissioner, rather than methods and analytical 13 models provided by the authority. The division requires the 14 commissioner to also adopt rules for the implementation and 15 adoption of the life cycle cost analysis. The division takes 16 effect upon enactment. 17 Division II of the bill makes technical changes related to 18 the definition of a “new investment” under the high quality 19 jobs program. 20 Division III of the bill relates to the authority’s business 21 outreach program, which provides technical and financial 22 assistance to businesses applying for federal small business 23 innovation research and small business technology transfer 24 program grants and contracts. 25 Under current law, the authority is allowed to provide 26 financial assistance of up to $25,000 to any single business 27 and is allowed to provide such financial assistance as matching 28 funds to allow a business to qualify for either federal 29 program. The division provides that the authority may provide 30 financial assistance of up to $100,000 to a business for any 31 individual federal award under those programs and that the 32 financial assistance may be used for any purpose to allow a 33 business to meet federal program requirements. 34 Division IV of the bill relates to enterprise zones. 35 -8- LSB 5171XD (9) 86 aw/sc 8/ 9