H.F. 2457 Section 1. NEW SECTION . 260K.1 Title. 1 This chapter shall be known and may be cited as the 2 “Credential-attainment Program Act” . 3 Sec. 2. NEW SECTION . 260K.2 Definitions. 4 As used in this chapter: 5 1. “Community college” means a community college established 6 under chapter 260C or a consortium of two or more community 7 colleges. 8 2. “Credential” means a postsecondary certificate or other 9 competency-based credential that is not authorized for federal 10 student aid under Tit. IV of the federal Higher Education Act 11 of 1965, as amended. “Credential” does not include an associate 12 degree or any degree beyond an associate degree. 13 3. “Credential-attainment program” means a program 14 established pursuant to section 260K.3. 15 4. “Economic downturn” includes a layoff of existing 16 employees, reduced employment levels, increased inventories, or 17 reduced sales, if specified in the program agreement entered 18 into under section 260K.3. 19 5. “Employer” means a business or consortium of businesses 20 engaged in interstate or intrastate commerce for the purpose 21 of manufacturing, processing, or assembling products, 22 construction, conducting research and development, or providing 23 services in interstate or intrastate commerce, but excludes 24 retail services. 25 6. “Participant” means an individual who is participating in 26 a credential-attainment program. 27 7. “Program costs” means all necessary and incidental costs 28 of providing program services. 29 8. “Program job” means a high-wage job available from an 30 employer pursuant to a program agreement entered into under 31 section 260K.3. 32 9. “Program job credit” means the credit as provided in 33 section 260K.4. 34 10. “Program job position” means a job position which is 35 -1- LSB 6781YH (3) 91 jda/jh 1/ 10

H.F. 2457 planned or available for an employee by the employer pursuant 1 to a program agreement. 2 11. “Program services” includes but is not limited to all 3 of the following, provided that they are pursuant to a program 4 agreement entered into under section 260K.3: 5 a. Program needs assessment and development. 6 b. Job task analysis. 7 c. Curriculum development and revision. 8 d. Instruction. 9 e. Instructional materials and supplies. 10 f. Computer software and upgrades. 11 g. Instructional support. 12 h. Administrative and student services. 13 i. Related school-to-career training programs. 14 j. Skill or career interest assessment services and testing. 15 k. Contracted services. 16 12. “School district” means a school district as described 17 in chapter 274. 18 Sec. 3. NEW SECTION . 260K.3 Program agreements. 19 1. a. A community college may enter into an agreement with 20 an employer in the community college’s merged area and a school 21 district in the community college’s merged area to establish a 22 credential-attainment program pursuant to which the community 23 college agrees to provide students who are enrolled in the 24 school district in grades nine through twelve with access to an 25 educational program that is designed to lead to a credential 26 while the student is enrolled in high school, and the employer 27 agrees to fund part of the program costs pursuant to section 28 260K.4 and to hire into a high-wage program job all students 29 who complete the educational program, attain the credential, 30 and graduate high school. 31 b. The credential-attainment program shall be developed by 32 the community college, employer, and school district, and, if a 33 bargaining agreement is in place that covers employees of the 34 employer, a representative of the bargaining unit. 35 -2- LSB 6781YH (3) 91 jda/jh 2/ 10

H.F. 2457 2. A program agreement may include reasonable and necessary 1 provisions to implement the credential-attainment program. If 2 a program agreement is entered into, the community college, 3 employer, and school district shall notify the department of 4 revenue as soon as possible. The community college shall 5 also file a copy of the program agreement with the department 6 of workforce development as required in section 260K.5. The 7 program agreement shall provide for program costs, including 8 deferred costs, which may be paid from any of the following 9 sources: 10 a. Program job credits which the employer receives based on 11 the number of program job positions agreed to by the employer 12 to be available under the agreement. 13 b. Cash or in-kind contributions by the employer toward the 14 program cost. At a minimum, the employer contribution shall be 15 twenty percent of the program costs. 16 c. Tuition, student fees, or special charges fixed by the 17 community college to defray program costs. 18 d. Guarantee by the employer of payments to be received 19 under paragraphs “a” and “b” . 20 3. A program agreement must do all of the following: 21 a. Include a provision that specifies the type and amount of 22 funding sources that will be used to pay for program costs. 23 b. Require program costs to be adjusted on an annual basis 24 based on the required program services and for a specific 25 number of participant positions. 26 c. Describe program services and schedules for 27 implementation. 28 d. Provide for a wage level of no less than two hundred 29 percent of the federal poverty level for a family of two as 30 defined by the most recently revised poverty income guidelines 31 as published by the United States department of health and 32 human services at the time the agreement is entered into. The 33 wage level must be recertified for each year provided in the 34 agreement on the anniversary of the effective date of the 35 -3- LSB 6781YH (3) 91 jda/jh 3/ 10

H.F. 2457 agreement. 1 e. Provide for employer default procedures. 2 4. The term of a program agreement shall not exceed five 3 years from the date of the program agreement. However, the 4 program agreement may be renewed. 5 5. A program agreement must allow an employer to decline to 6 hire a student who completes the educational program, attains 7 the credential, and graduates high school, as required by 8 subsection 1, paragraph “a” , if the employer experiences an 9 economic downturn. 10 Sec. 4. NEW SECTION . 260K.4 Program job credits from 11 withholding. 12 In order to develop and retain program jobs within the 13 state, a program agreement entered into under section 260K.3 14 may include a provision for program job credits based on 15 program jobs identified in the program agreement. If a program 16 agreement provides that part of the program costs are to be met 17 by receipt of program job credits, the method to be used shall 18 be as follows: 19 1. Program job credits shall be based upon the program job 20 positions identified and agreed to in the program agreement. 21 2. Eligibility for program job credits shall be based on 22 certification of program job positions and program job wages by 23 the employer at the time established in the program agreement. 24 An amount up to ten percent of the gross program job wage, as 25 certified by the employer in the program agreement, shall be 26 credited from the total payment made by an employer pursuant to 27 section 422.16. The employer shall receive a credit against 28 all withholding taxes due by the employer regardless of whether 29 the withholding from the employer of current program job wages 30 is less than ten percent. The employer shall remit the amount 31 of the credit quarterly in the same manner as withholding 32 payments are reported to the department of revenue, to the 33 community college to be allocated to and when collected paid 34 into a special fund of the community college to pay, in part, 35 -4- LSB 6781YH (3) 91 jda/jh 4/ 10

H.F. 2457 the program costs. The community college shall remit to the 1 treasurer of state for deposit in the general fund of the state 2 any moneys received by the community college from the employer 3 after the program costs have been paid. 4 3. The employer shall certify to the department of revenue 5 that the program job credit is in accordance with the program 6 agreement and shall provide other information the department 7 of revenue may require. 8 4. A community college shall certify to the department 9 of revenue that the amount of the program job credit is in 10 accordance with the program agreement and shall provide other 11 information the department of revenue may require. 12 5. Employees from an employer participating in a program 13 agreement shall receive full credit for the amount withheld as 14 provided in section 422.16. 15 Sec. 5. NEW SECTION . 260K.5 Maximum statewide 16 credential-attainment program job credit. 17 1. a. The total amount of credential-attainment program 18 job credits from all employers which shall be allocated for 19 all credential-attainment programs in the state in any one 20 fiscal year shall not exceed five million four hundred thousand 21 dollars. 22 b. A community college shall file a copy of each program 23 agreement with the department of workforce development. The 24 department of workforce development shall maintain an annual 25 record of the proposed credential-attainment program job 26 credits under each program agreement for each fiscal year. 27 c. Upon receiving a copy of a program agreement, the 28 department of workforce development shall allocate any 29 available amount of credential-attainment program job credits 30 to the community college according to the program agreement 31 sufficient for the fiscal year and for the term of the program 32 agreement. When the total available credential-attainment 33 program job credits are allocated for a fiscal year, the 34 department of workforce development shall notify all community 35 -5- LSB 6781YH (3) 91 jda/jh 5/ 10

H.F. 2457 colleges that the maximum amount has been allocated and that 1 further credential-attainment program job credits will not be 2 available for the remainder of the fiscal year. 3 d. Once credential-attainment program job credits have been 4 allocated to a community college, the full allocation shall be 5 received by the community college throughout the fiscal year 6 and for the term of the program agreement even if the statewide 7 credential-attainment program job credit maximum amount is 8 subsequently allocated and used. 9 2. a. The department of workforce development shall 10 administer the statewide allocations of credential-attainment 11 program job credits to credential-attainment programs. 12 b. The department of workforce development shall divide 13 equally among the community colleges thirty percent of the 14 credential-attainment program job credits available for each 15 fiscal year for allocation to each community college to be used 16 to provide funding for approved credential-attainment programs. 17 If any portion of the allocation to a community college under 18 this paragraph has not been committed by April 1 of the fiscal 19 year for which the allocation is made, the uncommitted portion 20 is available for use by other community colleges. 21 c. Once a community college has committed its allocation for 22 any fiscal year under this subsection, the community college 23 may receive additional credential-attainment program job credit 24 allocations from those credential-attainment program job 25 credits authorized and still available for that fiscal year. 26 Sec. 6. NEW SECTION . 260K.6 Customer tracking system. 27 All participants in the credential-attainment program shall 28 be included in the customer tracking system implemented by the 29 department of workforce development pursuant to section 84A.5 30 following program completion. 31 Sec. 7. NEW SECTION . 260K.7 Fund established —— allocation 32 of moneys. 33 1. A credential-attainment program fund is established 34 in the state treasury under the control of the department of 35 -6- LSB 6781YH (3) 91 jda/jh 6/ 10

H.F. 2457 workforce development. Moneys in the credential-attainment 1 program fund are appropriated to the department of 2 workforce development for purposes of funding the cost of 3 credential-attainment program capital projects for vertical 4 infrastructure as defined in section 8.57, subsection 3, 5 paragraph “c” . 6 2. If moneys are appropriated by the general assembly 7 to the department of workforce development for deposit in 8 the credential-attainment program fund, such moneys shall be 9 allocated equally to each community college. 10 Sec. 8. NEW SECTION . 260K.8 Administration and reporting. 11 1. The department of workforce development shall adopt 12 rules pursuant to chapter 17A to administer this chapter. 13 2. The department of workforce development shall submit 14 an annual report to the general assembly on or before 15 March 15 each year that contains information related to the 16 credential-attainment program. 17 Sec. 9. EFFECTIVE DATE. This Act takes effect July 1, 2027. 18 EXPLANATION 19 The inclusion of this explanation does not constitute agreement with 20 the explanation’s substance by the members of the general assembly. 21 This bill establishes the credential-attainment program 22 within the department of workforce development. 23 The bill authorizes a community college to enter into an 24 agreement with an employer and a school district to establish a 25 credential-attainment program pursuant to which the community 26 college agrees to provide students who are enrolled in the 27 school district in grades 9 through 12 with access to an 28 educational program that is designed to lead to a credential 29 while the student is enrolled in high school, and the employer 30 agrees to fund part of the program costs and to hire into a 31 high-wage program job all students who complete the educational 32 program, attain the credential, and graduate high school. The 33 bill provides that the credential-attainment program is to 34 be developed by the community college, employer, and school 35 -7- LSB 6781YH (3) 91 jda/jh 7/ 10

H.F. 2457 district, and, if a bargaining agreement is in place that 1 covers employees of the employer, a representative of the 2 bargaining unit. 3 The bill requires the community college, employer, and 4 school district to notify the department of revenue if a 5 program agreement is entered into, and the community college is 6 also required to file a copy of the program agreement with the 7 department of workforce development. 8 The bill establishes that the program agreement is required 9 to provide for program costs, and authorizes sources from which 10 program costs may be paid, which include program job credits. 11 The bill establishes other requirements related to the program 12 agreement, including that the program agreement must include a 13 provision that specifies the type and amount of funding sources 14 that will be used to pay for program costs; require program 15 costs to be adjusted on an annual basis; describe program 16 services and schedules for implementation; provide for a 17 specified wage level; and provide employer default procedures. 18 The term of a program agreement cannot exceed five years; 19 provided, however, that a program agreement may be renewed. A 20 program agreement must allow an employer to decline to hire a 21 student if the employer experiences an economic downturn. 22 The bill establishes the method that is required to be used 23 if a program agreement provides that part of the program costs 24 are to be met by receipt of program job credits. Pursuant 25 to that method, program job credits are to be based on the 26 program job positions identified in the program agreement. 27 Eligibility for program job credits is based on certification 28 of program job positions and program job wages by the employer. 29 An amount up to 10 percent of the gross program job wage is 30 credited from the total payment made by an employer pursuant 31 to Code section 422.16 (withholding of income tax at source 32 —— penalties —— interest —— declaration of estimated tax —— 33 bond). The employer receives a credit against all withholding 34 taxes due by the employer regardless of whether the withholding 35 -8- LSB 6781YH (3) 91 jda/jh 8/ 10

H.F. 2457 from the employer of current program job wages is less than 10 1 percent. The employer is required to remit the amount of the 2 credit quarterly in the same manner as withholding payments are 3 reported to the department of revenue to the community college 4 to be allocated to, and when collected, paid into a special 5 fund of the community college to pay, the program costs. The 6 employer is required to certify to the department of revenue 7 that the program job credit is in accordance with the program 8 agreement, and the community college is required to certify to 9 the department of revenue that the amount of the program job 10 credit is in accordance with the program agreement. Employees 11 from an employer participating in a program agreement receive 12 full credit for the amount withheld as provided in Code section 13 422.16. 14 The total amount of credential-attainment program job 15 credits from all employers which shall be allocated for 16 all credential-attainment programs in the state in any one 17 fiscal year cannot exceed $5.4 million. The bill requires 18 the department of workforce development to maintain an annual 19 record of the proposed credential-attainment program job 20 credits under each program agreement for each fiscal year. 21 The bill requires the department of workforce development to 22 administer the statewide allocation of credential-attainment 23 program job credits and establishes a process related to how 24 the department of workforce development allocates available 25 credential-attainment program job credits. 26 The bill requires all participants in the 27 credential-attainment program to be included in the customer 28 tracking system implemented by the department of workforce 29 development following program completion. 30 The bill establishes a credential-attainment program fund 31 in the state treasury under the control of the department of 32 workforce development. The moneys in the fund are appropriated 33 to the department of workforce development for purposes of 34 funding the cost of credential-attainment program capital 35 -9- LSB 6781YH (3) 91 jda/jh 9/ 10

H.F. 2457 projects for vertical infrastructure. The bill provides that 1 if the general assembly appropriates moneys for this purpose, 2 such moneys are required to be allocated equally to each 3 community college. 4 The bill requires the department of workforce development to 5 adopt rules to administer the credential-attainment program and 6 to submit annual reports to the general assembly relating to 7 the credential-attainment program. 8 The bill defines “community college”, “credential”, 9 “credential-attainment program”, “economic downturn”, 10 “employer”, “participant”, “program costs”, “program job”, 11 “program job credit”, “program job position”, “program 12 services”, and “school district”. 13 The bill takes effect July 1, 2027. 14 -10- LSB 6781YH (3) 91 jda/jh 10/ 10