SF 2289 (LSB 5327SV (1) 90)

SENATE FILE 2289

BY  COMMITTEE ON COMMERCE

(SUCCESSOR TO SSB 3109)

A BILL FOR

An Act relating to economic development and energy shortages under the purview of the economic development authority and governor, and providing penalties.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

DIVISION I
ECONOMIC DEVELOPMENT PROGRAMS

    Section 1.  Section 15.106B, subsection 5, paragraph b, Code 2024, is amended by striking the paragraph.
    Sec. 2.  NEW SECTION.  15.106E  Application or award —— prohibition.
   1.  The authority may prohibit a person from receiving an award of financial assistance, or from being selected as a vendor to provide goods or services to the authority in any of the following circumstances:
   a.  An act or omission by the person seriously affects or threatens public health, public safety, or the environment.
   b.  The person is charged with or convicted of a crime involving dishonesty.
   c.  An act or omission by the person indicates a lack of integrity or honesty.
   d.  The person violates the terms of an agreement or transaction that detrimentally impacts the integrity of a program administered by the authority, or other governmental entity as defined in section 8A.101.
   e.  A compelling cause exists that is relevant to and affects the person’s obligations under the programs administered by the authority, or is relevant to and affects the provision of goods and services to the authority by a vendor.
   2.  Upon a determination by the authority, a person shall be prohibited from receiving an award of financial assistance, or from being selected as a vendor pursuant to subsection 1. The authority shall provide written notice to the prohibited person stating the reason for the prohibition. The authority may immediately disqualify a prohibited person from receiving financial assistance, or from being selected as a vendor.
   3.  The authority shall adopt rules as necessary pursuant to chapter 17A to administer this section.
    Sec. 3.  Section 15.108, subsection 2, Code 2024, is amended by striking the subsection and inserting in lieu thereof the following:
   2.  Marketing.  To aid in all of the following:
   a.  The marketing and promotion of Iowa products and services.
   b.  The promotion and development of the agricultural processing industry in the state.
    Sec. 4.  Section 15.108, subsection 3, paragraph a, subparagraph (5), Code 2024, is amended to read as follows:
   (5)  Encourage cities, counties, local and regional government organizations, and local and regional economic development organizations to develop and implement comprehensive community and economic development plans. In evaluating financial assistance applications, the authority shall award supplementary credit to applications submitted by cities, counties, local and regional government organizations, and local and regional economic development organizations that have developed a comprehensive community and economic development plan.
    Sec. 5.  Section 15.108, subsection 4, Code 2024, is amended by striking the subsection and inserting in lieu thereof the following:
   4.  Exporting.  To promote and aid in the marketing and sale of Iowa industrial and agricultural products and services outside of the state. To carry out this responsibility, the authority shall:
   a.  Perform the duties and activities specified for the agricultural marketing program under sections 15.201 and 15.202.
   b.  Seek assistance and advice from the Iowa district export council which advises the United States department of commerce.
    Sec. 6.  Section 15.108, subsection 5, paragraph d, Code 2024, is amended to read as follows:
   d.  Coordinate with other divisions of the authority to add Promote the contributions of Iowa’s recreation, tourism, and leisure resources to the agricultural and other images which characterize the state on a national level.
    Sec. 7.  Section 15.108, subsection 5, paragraph o, Code 2024, is amended by striking the paragraph.
    Sec. 8.  Section 15.108, subsection 6, paragraph c, Code 2024, is amended by striking the paragraph and inserting in lieu thereof the following:
   c.  Provide aid for the development and implementation of the Iowa targeted small business procurement Act established in sections 73.15 through 73.22.
    Sec. 9.  Section 15.108, subsection 6, paragraphs f and g, Code 2024, are amended by striking the paragraphs.
    Sec. 10.  Section 15.108, subsection 7, Code 2024, is amended by striking the subsection.
    Sec. 11.  Section 15.108, subsection 10, paragraph b, subparagraph (3), Code 2024, is amended to read as follows:
   (3)  Establish programs which assist communities or local entities in developing housing to meet a range of community needs, including programs to assist homeless shelter operations and programs to assist in the development of housing to enhance economic development opportunities in the community.
    Sec. 12.  Section 15.371, subsection 5, paragraph e, Code 2024, is amended to read as follows:
   e.  Employ a minimum of three full-time employees and no more than seventy-five one hundred twenty-five full-time employees across all of the manufacturer’s locations.
    Sec. 13.  NEW SECTION.  73.22  Reports.
   1.  By December 1 of each calendar year, the department of administrative services shall provide a written summary to the economic development authority of all activities undertaken by the department of administrative services to maximize the purposes of this subchapter during the immediately preceding fiscal year.
   2.  By December 1 of each calendar year, the economic development authority shall compile a list of the procurement goals established pursuant to section 73.16, subsection 2, for the prior fiscal year, and the performance of each agency or department of state government having purchasing authority in meeting the goals. The compilation shall be based upon the reports required to be filed under section 73.16, subsection 2.
   3.  By January 15 of each calendar year, the economic development authority shall submit to the governor and the general assembly a summary of all reports required under this section.
   4.  The director of the economic development authority, in cooperation with the department of administrative services and other state agencies shall do all of the following:
   a.  Publicize the targeted small business procurement goal program to targeted small businesses and to agencies of state government.
   b.  Identify targeted small businesses able to perform contracts under the program.
   c.  Encourage targeted small businesses to participate in the program.
    Sec. 14.  REPEAL.  Sections 15.246, 15.271, and 15.272, Code 2024, are repealed.
DIVISION II
ENERGY SHORTAGES

    Sec. 15.  Section 12.28, subsection 6, Code 2024, is amended to read as follows:
   6.  The maximum principal amount of financing agreements which the treasurer of state can enter into shall be one million dollars per state agency in a fiscal year, subject to the requirements of section 8.46. For the fiscal year, the treasurer of state shall not enter into more than one million dollars of financing agreements per state agency, not considering interest expense. However, the treasurer of state may enter into financing agreements in excess of the one million dollar per agency per fiscal year limit if a constitutional majority of each house of the general assembly, or the legislative council if the general assembly is not in session, and the governor, authorize the treasurer of state to enter into additional financing agreements above the one million dollar authorization contained in this section. The treasurer of state shall not enter into a financing agreement for real or personal property which is to be constructed for use as a prison or prison-related facility without prior authorization by a constitutional majority of each house of the general assembly and approval by the governor of the use, location, and maximum cost, not including interest expense, of the real or personal property to be financed. However, financing agreements for an energy conservation measure, as defined in section 7D.34, for an energy management improvement, as defined in section 473.19, or for costs associated with projects under section 473.13A, are exempt from the provisions of this subsection, but are subject to the requirements of section 7D.34. In addition, financing agreements funded through the materials and equipment revolving fund established in section 307.47 are exempt from the provisions of this subsection.
    Sec. 16.  Section 29C.2, Code 2024, is amended by adding the following new subsections:
   NEW SUBSECTION.  4A.  “Energy” or “energy sources” means the same as defined in section 473.1.
   NEW SUBSECTION.  5A.  “Liquid fossil fuel” means heating oil, diesel oil, motor gasoline, propane, residual fuel oil, kerosene, and aviation fuel.
   NEW SUBSECTION.  7A.  “Prime supplier” means an individual, trustee, agency, partnership, association, corporation, company, municipality, political subdivision, or other legal entity that makes the first sale of liquid fossil fuel into the state distribution system for consumption within the state.
    Sec. 17.  Section 29C.6, Code 2024, is amended by adding the following new subsection:
   NEW SUBSECTION.  18.  a.  Determine that an actual acute shortage of usable energy has occurred or is imminent based upon circumstances indicated in the state energy security plan created in section 473.5, or in response to a declaration of a severe energy supply interruption by the president of the United States under the federal Emergency Energy Conservation Act of 1979, Pub. L. No. 96-102, as amended. Upon such a determination, the governor may do any of the following by proclamation:
   (1)  Regulate the operating hours of agencies and instrumentalities of state government, political subdivisions, private institutions, and business facilities that consume energy to the extent the regulation is not hazardous or detrimental to the health, safety, or welfare of the people of this state. However, the governor shall not have authority to suspend, amend, or nullify any service provided by a public utility, as defined in section 476.1, if the public utility is providing such service pursuant to an order or rule of a federal agency which has jurisdiction over the public utility.
   (2)  Establish a system for the distribution and supply of energy. The system shall not include a coupon rationing program, unless the coupon rationing program is federally mandated.
   (3)  Curtail public and private transportation utilizing energy. Curtailment may include measures designed to promote the use of carpools and mass transit systems.
   (4)  Accept the delegation of authority for other mandatory measures under the federal Emergency Energy Conservation Act of 1979, Pub. L. No. 96-102, as amended.
   (5)  Require a prime supplier to reserve a specified fraction of the prime supplier’s projected total monthly release of liquid fossil fuel into the state distribution system. The governor or the governor’s designee may release any or all of the fuel required to be reserved by a prime supplier to end-users or to distributors for release through normal retail distribution channels. However, the specified fraction required to be reserved shall not exceed three percent for propane, aviation fuel, and residual fuel oil, and five percent for motor gasoline, heating oil, and diesel oil.
   b.  A person who violates paragraph “a” commits a simple misdemeanor punishable as a scheduled violation pursuant to section 805.8C, subsection 1. If the violation is continuous and stationary in its nature and subsequent compliance can easily be ascertained, an officer may issue a memorandum of warning in lieu of a citation providing a reasonable amount of time not exceeding fourteen days to correct the violation and to comply with the requirements of the proclamation.
    Sec. 18.  Section 279.53, Code 2024, is amended to read as follows:
   279.53  Loan proceeds.
   The proceeds of loans issued to school districts pursuant to section 279.48, or 279.52, or 473.20 shall be deposited into either the general fund of a school district or the physical plant and equipment levy fund. The board of directors shall expend the amount of the principal and interest due each year to maturity from the same fund into which the loan proceeds were deposited.
    Sec. 19.  Section 298.3, subsection 1, paragraph g, Code 2024, is amended by striking the paragraph.
    Sec. 20.  Section 323A.2, subsection 1, paragraph c, Code 2024, is amended to read as follows:
   c.  The director of the economic development authority determines that the franchisee has demonstrated that a special hardship exists in the community served by the franchisee relating to the public health, safety, and welfare, as specified under the rules of the authority.
    Sec. 21.  Section 473.1, subsection 3, Code 2024, is amended by striking the subsection.
    Sec. 22.  Section 473.3, subsection 2, Code 2024, is amended by striking the subsection.
    Sec. 23.  NEW SECTION.  473.4  Duties of the authority.
   The authority shall do the following:
   1.  Periodically update the Iowa energy plan that identifies objectives and strategies for developing the energy sector in the state.
   2.  Administer and coordinate federal funds received for energy conservation, energy management, and alternative and renewable energy programs.
   3.  Apply for, receive, administer, and use federal or other funds available for achieving the purposes of this chapter.
    Sec. 24.  NEW SECTION.  473.5  Energy security plan.
   1.  The governor or the governor’s designee shall maintain an energy security plan.
   2.  The energy security plan shall include but is not limited to the following:
   a.  A description of the circumstances that indicate an actual or imminent acute shortage of usable energy, including liquid fossil fuels.
   b.  Any action to be taken by the authority or relevant agencies in response to a proclamation issued pursuant to section 29C.6, subsection 18.
    Sec. 25.  Section 805.8C, subsection 1, Code 2024, is amended to read as follows:
   1.  Energy emergency violations.  For violations of an executive order issued a proclamation by the governor under the provisions of section 473.8 section 29C.6, subsection 18, the scheduled fine is seventy dollars.
    Sec. 26.  REPEAL.  Sections 473.7, 473.8, 473.9, 473.10, 473.13A, 473.15, 473.19, 473.19A, 473.20, 473.20A, and 473.41, Code 2024, are repealed.
    Sec. 27.  TRANSFER OF MONEYS.  On the effective date of this division of this Act, any moneys remaining in the building energy management fund in section 473.19A, Code 2024, shall be transferred to the general fund of the state.
EXPLANATION
The inclusion of this explanation does not constitute agreement with
the explanation’s substance by the members of the general assembly.
   This bill relates to economic development and energy shortages under the purview of the economic development authority and governor.
   DIVISION I —— ECONOMIC DEVELOPMENT PROGRAMS. The bill strikes the specific power of the economic development authority (authority) to charge a business or individual a fee for use of the authority’s federal EB-5 immigrant investor regional center.
   The bill specifies the circumstances in which the authority may prohibit a person from receiving an award or financial assistance, or from being selected as a vendor to provide goods or services to the authority. The circumstances include: an act or omission by the person that seriously affects or threatens public health, public safety, or the environment; the person is charged with or convicted of a crime involving dishonesty; an act or omission by the person that indicates a lack of integrity or honesty; the person violates the terms of an agreement or transaction; or a compelling cause exists that is relevant to and affects the obligations of the person or vendor under programs administered by the authority. The authority is required to provide written notification to the person of the reason for the prohibition, and may immediately disqualify such a person from receiving financial assistance or being selected as a vendor.
   The bill makes numerous changes to Code section 15.108 (primary responsibilities of the authority). The bill strikes the requirement that the authority establish a federal procurement office staffed with experts in marketing to federal agencies.
   The bill strikes provisions allowing the authority to adopt a label or trademark that identifies Iowa products and services, and to promote an import substitution program to encourage the purchase of domestically produced Iowa goods.
   In financial assistance applications, the bill strikes a provision requiring the authority to award a supplementary credit to applications submitted by local governments or regional economic development organizations if such governmental entity or organization has developed a comprehensive community and economic development plan.
   The bill strikes a provision encouraging coordination with the Iowa board of regents and area community colleges to establish a conversational foreign language training program.
   A provision encouraging the promotion and assistance in the creation of international currency and barter exchanges is stricken.
   Under the bill, the governor is no longer required to appoint an export advisory board.
   The bill strikes a provision encouraging college graduates from Iowa schools and former residents who reside in foreign countries to become cultural advisors for the authority and for Iowa businesses participating in trade missions, and strikes the provision encouraging foreign students studying in Iowa to be used as contacts with Iowa businesses engaged in export activities.
   A revolving fund is stricken by the bill that allows the authority to receive contributions for use in start-up expansion of tourism special events, fairs, and festivals.
   The bill moves provisions regarding the submission of reports relating to the targeted small business procurement program in Code section 15.108(6) to new Code section 73.22 as created in the bill. However, the bill removes the provision in Code section 15.108(6)(3) requiring the director of the authority to assist a targeted small business unable to perform a procurement contract, and makes other related changes.
   The bill strikes a provision encouraging the authority to cooperate with other state agencies to establish a program to educate employers on the rates and workings of the state unemployment compensation program and state workers’ compensation program.
   Under the bill, the authority is no longer required to study the feasibility of reducing the number of state licenses, permits, and certificates required to conduct business.
   The bill strikes a provision allowing the authority to help local entities develop programs to assist homeless shelter operations.
   The bill strikes a provision requiring the authority to provide case management assistance to low-income persons establishing or expanding a small business, and repeals the case management program in Code section 15.246.
   The bill expands the manufacturing 4.0 technology program by allowing an employer who employs up to 125 employees to qualify for the program. Currently, an employer with more than 75 employees does not qualify for the program.
   The bill repeals provisions requiring a statewide welcome center program and related provisions.
   DIVISION II —— ENERGY SHORTAGES. Under current law, if the authority by resolution determines the people of this state are threatened by an actual or impending acute shortage of energy, the authority is required to transmit the resolution to the governor together with recommendations. After transmission of such a resolution under current law, the governor may issue a proclamation of emergency.
   The bill grants the governor sole power to issue a proclamation that an actual acute shortage of usable energy has occurred or is imminent based upon the energy security plan of the state developed in the bill, or allows the governor to base the proclamation in response to a declaration of severe energy supply interruption by the president of the United States under the federal Emergency Energy Conservation Act of 1979, as amended. The bill moves the current proclamation powers in Code section 473.8(2) to new Code section 29C.6(18), and the powers essentially remain the same.
   The bill moves the definitions of “prime supplier” and “liquid fossil fuel” from Code section 473.9 to Code section 29C.2, and defines “energy” or “energy sources” in Code section 29C.2 to mean the same as in Code section 473.1.
   The bill strikes the ability of the authority to adopt rules for energy-related hardships that result in public, health, safety, and welfare concerns in Code section 323A.2(1).
   The bill strikes a provision requiring state government to be a model and testing ground for the use of energy and energy systems.
   The bill authorizes the creation of an energy security plan in new Code section 473.5. The bill requires the energy security plan to include but is not limited to a description of circumstances that may lead to an actual or impending acute shortage of energy, including liquid fossil fuels, and action plans to be taken by relevant state agencies if a disaster emergency proclamation relating to energy is issued by the governor.
   The bill repeals Code section 473.7 (duties of authority) and removes most of the duties of the authority. The remaining duties of the authority are expressed in new Code section 473.4 created in the bill. The duties include periodically updating the energy security plan authorized in the bill.
   The bill updates the simple misdemeanor scheduled violation for energy emergency violations in Code section 805.8C(1) due to moving the provisions relating to the proclamation declaration from Code section 473.8 to 29C.6(18) in the bill.
   The bill repeals provisions relating to energy emergencies, energy management, energy funds, and energy loan programs under the purview of the authority including sections 473.7 (duties of authority), 473.8 (emergency powers), 473.9 (set-aside definitions), 473.10 (reserve required), 473.13A (energy management improvements identified and implemented), 473.15 (annual report), 473.19 (building energy management program), 473.19A (building energy management fund), 473.20 (energy loan program), 473.20A (self-liquidating financing), and 473.41 (energy city designation program).
   On July 1, 2024, the date of the repeal of the building energy management fund in Code section 473.19A, the bill transfers any remaining moneys in the fund to the general fund of the state.