House File 2065 - Introduced HOUSE FILE 2065 BY BRINK , KERR , MAXWELL , THORUP , WILLS , BACON , MITCHELL , PAUSTIAN , BAXTER , SEXTON , KAUFMANN , HUSEMAN , DOLECHECK , SORENSEN , THOMPSON , JENEARY , GERHOLD , OSMUNDSON , HITE , KLEIN , GUSTAFSON , SHIPLEY , BEST , CARLSON , MOORE , BLOOMINGDALE , and A. MEYER A BILL FOR An Act relating to certain tax credits and assistance awarded 1 by the economic development authority under the high quality 2 jobs program to eligible businesses, including those in 3 rural communities, and including effective date provisions. 4 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 5 TLSB 5580YH (10) 88 ko/jh

H.F. 2065 Section 1. Section 15.327, Code 2020, is amended by adding 1 the following new subsection: 2 NEW SUBSECTION . 27. “Rural community” means any city 3 located in this state with a population of thirty thousand 4 or less in a county with a population of fifty thousand or 5 less. A rural community located in more than one county shall 6 be considered to be located in the county having the greatest 7 taxable base within the city. 8 Sec. 2. Section 15.335A, subsection 1, unnumbered paragraph 9 1, Code 2020, is amended to read as follows: 10 Tax incentives are available to eligible businesses as 11 provided in this section subsection and subsection 1A . The 12 incentives are based upon the number of jobs created or 13 retained that pay at least one hundred twenty percent of the 14 qualifying wage threshold and the amount of the qualifying 15 investment made according to the following schedule: 16 Sec. 3. Section 15.335A, Code 2020, is amended by adding the 17 following new subsection: 18 NEW SUBSECTION . 1A. Tax incentives are available to 19 eligible businesses located in rural communities as provided 20 in this subsection. The incentives are based upon the number 21 of jobs created or retained that pay at least one hundred ten 22 percent of the qualifying wage threshold and the amount of the 23 qualifying investment made according to the following schedule: 24 a. The number of jobs is zero and economic activity is 25 furthered by the qualifying investment and the amount of the 26 qualifying investment is one of the following: 27 (1) Less than fifty thousand dollars, then the tax incentive 28 is the investment tax credit of up to two percent. 29 (2) At least fifty thousand dollars but less than two 30 hundred fifty thousand dollars, then the tax incentives are the 31 investment tax credit of up to two percent and the sales tax 32 refund. 33 (3) At least two hundred fifty thousand dollars, then the 34 tax incentives are the investment tax credit of up to two 35 -1- LSB 5580YH (10) 88 ko/jh 1/ 5

H.F. 2065 percent, the sales tax refund, and the additional research and 1 development tax credit. 2 b. The number of jobs is one but not more than five and the 3 amount of the qualifying investment is one of the following: 4 (1) Less than fifty thousand dollars, then the tax incentive 5 is the investment tax credit of up to three percent. 6 (2) At least fifty thousand dollars but less than two 7 hundred fifty thousand dollars, then the tax incentives are the 8 investment tax credit of up to three percent and the sales tax 9 refund. 10 (3) At least two hundred fifty thousand dollars, then the 11 tax incentives are the investment tax credit of up to three 12 percent, the sales tax refund, and the additional research and 13 development tax credit. 14 c. The number of jobs is six but not more than ten and the 15 amount of the qualifying investment is one of the following: 16 (1) Less than fifty thousand dollars, then the tax incentive 17 is the investment tax credit of up to four percent. 18 (2) At least fifty thousand dollars but less than two 19 hundred fifty thousand dollars, then the tax incentives are the 20 investment tax credit of up to four percent and the sales tax 21 refund. 22 (3) At least two hundred fifty thousand dollars, then the 23 tax incentives are the investment tax credit of up to four 24 percent, the sales tax refund, and the additional research and 25 development tax credit. 26 d. The number of jobs is eleven but not more than fifteen 27 and the amount of the qualifying investment is one of the 28 following: 29 (1) Less than fifty thousand dollars, then the tax incentive 30 is the investment tax credit of up to five percent. 31 (2) At least fifty thousand dollars but less than two 32 hundred fifty thousand dollars, then the tax incentives are the 33 investment tax credit of up to five percent and the sales tax 34 refund. 35 -2- LSB 5580YH (10) 88 ko/jh 2/ 5

H.F. 2065 (3) At least two hundred fifty thousand dollars, then the 1 tax incentives are the investment tax credit of up to five 2 percent, the sales tax refund, and the additional research and 3 development tax credit. 4 e. The number of jobs is sixteen or more and the amount of 5 the qualifying investment is one of the following: 6 (1) Less than fifty thousand dollars, then the tax incentive 7 is the investment tax credit of up to six percent. 8 (2) At least fifty thousand dollars but less than two 9 hundred fifty thousand dollars, then the tax incentives are the 10 investment tax credit of up to six percent and the sales tax 11 refund. 12 (3) At least two hundred fifty thousand dollars, then the 13 tax incentives are the investment tax credit of up to six 14 percent, the sales tax refund, and the additional research and 15 development tax credit. 16 f. The number of jobs is thirty-one but not more than forty 17 and the amount of the qualifying investment is at least five 18 million dollars, then the tax incentives are the local property 19 tax exemption, the investment tax credit of up to seven 20 percent, the sales tax refund, and the additional research and 21 development tax credit. 22 g. The number of jobs is forty-one but not more than sixty 23 and the amount of the qualifying investment is at least five 24 million dollars, then the tax incentives are the local property 25 tax exemption, the investment tax credit of up to eight 26 percent, the sales tax refund, and the additional research and 27 development tax credit. 28 h. The number of jobs is sixty-one but not more than 29 eighty and the amount of the qualifying investment is at least 30 five million dollars, then the tax incentives are the local 31 property tax exemption, the investment tax credit of up to nine 32 percent, the sales tax refund, and the additional research and 33 development tax credit. 34 i. The number of jobs is eighty-one but not more than one 35 -3- LSB 5580YH (10) 88 ko/jh 3/ 5

H.F. 2065 hundred and the amount of the qualifying investment is at least 1 five million dollars, then the tax incentives are the local 2 property tax exemption, the investment tax credit of up to ten 3 percent, the sales tax refund, and the additional research and 4 development tax credit. 5 j. The number of jobs is at least one hundred one and the 6 amount of the qualifying investment is at least ten million 7 dollars, then the tax incentives are the local property 8 tax exemption, the investment tax credit of up to eleven 9 percent, the sales tax refund, and the additional research and 10 development tax credit. 11 Sec. 4. Section 15.335B, subsection 3, paragraph c, Code 12 2020, is amended to read as follows: 13 c. (1) Consider the amount and type of the local community 14 match . The as follows: 15 (a) In a community with a population of less than five 16 thousand a community match shall not be required. 17 (b) In a community with a population equal to or greater 18 than five thousand, but less than fifteen thousand, a community 19 match of at least five percent of the projected funds to be 20 expended by the eligible business shall be required. 21 (c) In a community with a population equal to or greater 22 than fifteen thousand, but less than thirty thousand, a 23 community match of at least ten percent of the projected funds 24 to be expended by the eligible business shall be required. 25 (d) In a community with a population equal to or greater 26 than thirty thousand a community match of at least twenty 27 percent of the projected funds to be expended by the eligible 28 business shall be required. 29 (2) Notwithstanding subparagraph (1), the authority may 30 provide assistance to an early-stage business in a high-growth 31 industry regardless of the amount of local match involved. 32 Sec. 5. NEW SECTION . 15.337A Rules. 33 The authority shall adopt rules pursuant to chapter 17A to 34 administer this part. 35 -4- LSB 5580YH (10) 88 ko/jh 4/ 5

H.F. 2065 Sec. 6. EFFECTIVE DATE. This Act, being deemed of immediate 1 importance, takes effect upon enactment. 2 EXPLANATION 3 The inclusion of this explanation does not constitute agreement with 4 the explanation’s substance by the members of the general assembly. 5 This bill relates to certain tax credits and assistance 6 awarded under the high quality jobs program by the economic 7 development authority to eligible businesses, including those 8 in rural communities. 9 The bill provides for tax incentives for eligible businesses 10 in rural communities. “Rural community” is defined in the bill 11 as a city located in this state with a population of 30,000 or 12 less in a county with a population of 50,000 or less. If the 13 rural community is located in more than one county, the rural 14 community is considered to be located in the county that has 15 the greatest taxable base within the city. The tax incentives 16 are based upon the number of jobs created or retained that pay 17 at least 110 percent of the qualifying wage threshold and the 18 amount of the qualifying investment. The tax incentives are 19 based upon a schedule as detailed in the bill. 20 The bill also details the requirements for a community 21 match, based on the size of the community, in order for an 22 eligible business to be awarded assistance by the authority 23 from the fund created in Code section 15.335B. 24 The bill directs the authority to adopt rules to administer 25 the high quality jobs program. 26 The bill takes effect upon enactment. 27 -5- LSB 5580YH (10) 88 ko/jh 5/ 5