House File 2550 - Introduced HOUSE FILE 2550 BY THOMSON A BILL FOR An Act relating to small nuclear reactors, including the 1 establishment of the Iowa modular reactor committee within 2 the economic development authority, financial incentives, 3 and the potential establishment of related education 4 programs and including effective date provisions. 5 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 6 TLSB 6806HH (2) 91 nls/ko

H.F. 2550 Section 1. Section 15.522, subsection 2, Code 2026, is 1 amended by adding the following new paragraph: 2 NEW PARAGRAPH . 0l. Small modular reactors, as that term 3 is defined in section 15.540. 4 Sec. 2. NEW SECTION . 15.540 Definitions. 5 For purposes of this part, unless the context otherwise 6 requires: 7 1. “Committee” means the Iowa small modular reactor 8 committee established in section 15.541. 9 2. “Qualified project” means a small modular reactor project 10 that involves any of the following: 11 a. Small modular reactor design, licensing, or testing. 12 b. Small modular reactor fabrication or assembly. 13 c. Small modular reactor fuel handling, storage, or 14 recycling technology. 15 d. Small modular reactor power generation facilities. 16 e. Industrial heat or hydrogen production coupled to small 17 modular reactors. 18 f. Small modular reactor-related supply chain manufacturing, 19 certified or certifiable under nuclear quality standards. 20 3. “Small modular reactor” means a nuclear fission reactor 21 that meets all of the following requirements: 22 a. The small modular reactor is designed for factory 23 fabrication and modular deployment. 24 b. The small modular reactor is licensed or licensable by 25 the United States nuclear regulatory commission. 26 Sec. 3. NEW SECTION . 15.541 Iowa small modular reactor 27 committee. 28 1. The Iowa small modular reactor committee is established 29 within the authority. The committee shall do all of the 30 following: 31 a. Serve as the statewide coordinating entity for small 32 modular reactor development. 33 b. Act as a permitting and interagency coordination office 34 as permitted by federal law. 35 -1- LSB 6806HH (2) 91 nls/ko 1/ 9

H.F. 2550 c. Designate small modular reactor priority development 1 zones for purposes of this section. 2 d. Administer financial incentives for purposes of this 3 section. 4 e. Coordinate workforce, research, and education initiatives 5 for purposes of this section. 6 f. Market Iowa nationally and internationally as a small 7 modular reactor hub. 8 g. Enter into public-private partnerships for purposes of 9 this section. 10 2. The committee shall accept, process, and approve 11 applications for qualified projects. The committee shall issue 12 a determination on an application for a qualified project no 13 later than one hundred eighty calendar days after receipt of a 14 completed application, unless extended for good cause. Failure 15 to deny or accept an application for a qualified project within 16 the time limit shall constitute conditional approval of the 17 application, subject to safety conditions. 18 3. The committee may designate pre-certified small modular 19 reactor sites as permitted by federal law including but not 20 limited to any of the following: 21 a. Brownfields. 22 b. Retired fossil fuel generation sites. 23 c. Industrial campuses. 24 d. State owned land. 25 4. The committee may issue revenue bonds to qualified 26 projects from the revenue bonds capitals fund created in 27 section 12.88, subject to appropriation by the Iowa finance 28 authority and subject to approval of the economic development 29 authority. 30 Sec. 4. NEW SECTION . 15.542 Qualified project tax 31 incentives. 32 1. a. For tax years beginning on or after January 1, 2027, 33 a tax credit shall be allowed against the taxes imposed in 34 chapter 422, subchapters II, III, and V, and in chapter 432, 35 -2- LSB 6806HH (2) 91 nls/ko 2/ 9

H.F. 2550 and against the moneys and credits tax imposed in section 1 533.329, for a portion of a taxpayer’s qualified capital 2 investment in a qualified project. 3 b. An individual may claim a tax credit under this section 4 as a partnership, limited liability company, S corporation, 5 estate, or trust electing to have income taxed directly to 6 the individual. The amount claimed by the individual shall 7 be based upon the pro rata share of the individual’s earnings 8 from the partnership, limited liability company, S corporation, 9 estate, or trust. 10 c. An individual affiliated with a qualified project shall 11 not be eligible for a tax credit under this section. 12 d. In lieu of claiming a refund, a taxpayer may elect to 13 have the overpayment shown on the taxpayer’s final, completed 14 return credited to the tax liability for the immediately 15 succeeding tax year. 16 e. The amount of the tax credit shall equal thirty percent 17 of the taxpayer’s qualified capital investment in a qualified 18 project. 19 f. A tax credit shall not be transferred to any other 20 person. 21 g. The authority shall develop a system for registration and 22 issuance of tax credits authorized pursuant to this subsection 23 and shall control distribution of all tax credit certificates 24 to investors pursuant to this subsection. The authority 25 shall develop rules for the qualification and administration 26 of qualified projects. The department of revenue shall 27 adopt rules pursuant to chapter 17A as necessary for the 28 administration of this subsection. 29 2. A qualified small modular reactor facility responsible 30 for a qualified project may enter into an agreement with the 31 authority for a supplemental new jobs credit from withholding 32 from jobs created under the qualified project. The agreement 33 shall provide that a new jobs credit from withholding in an 34 amount equal to one and one-half percent of the gross wages 35 -3- LSB 6806HH (2) 91 nls/ko 3/ 9

H.F. 2550 paid by the qualified small modular reactor facility pursuant 1 to section 422.16 is authorized to fund the qualified project. 2 3. a. A qualified small modular reactor facility 3 responsible for a qualified project may claim a refund of 4 the sales and use taxes paid under chapter 423 prior to the 5 completion of the qualified project that are directly related 6 to a qualified project and specified in an agreement between 7 the qualified small modular reactor facility and the authority. 8 b. To receive a refund, a claim shall be filed by a 9 qualified small modular reactor facility with the department 10 of revenue as follows: 11 (1) The qualified small modular reactor facility shall 12 state under oath, on forms provided by the department of 13 revenue, the amount of sales and use taxes paid under chapter 14 423 prior to the completion of the qualified project that are 15 directly related to a qualified project and specified in the 16 agreement. 17 (2) The qualified small modular reactor facility shall, 18 after the agreement completion date, make application to the 19 department of revenue for any refund of the amount of sales and 20 use taxes paid under chapter 423 prior to the completion of the 21 qualified project that were directly related to a qualified 22 project and specified in the agreement. The application shall 23 be made in the manner and upon forms to be provided by the 24 department of revenue. The department of revenue shall audit 25 the claim and, if approved, issue a warrant to the qualified 26 small modular reactor facility. The application must be made 27 within one year after the agreement completion date. A claim 28 filed in accordance with this subsection shall not be denied by 29 reason of a time limitation for filing a refund claim set forth 30 in section 423.47. 31 4. a. A community in which a qualified small modular 32 reactor facility is located may grant the qualified small 33 modular reactor facility a property tax exemption for a portion 34 of the actual value added by improvements to real property 35 -4- LSB 6806HH (2) 91 nls/ko 4/ 9

H.F. 2550 directly related to the qualified small modular reactor 1 facility’s created jobs. The community may allow a property 2 tax exemption for a period not to exceed twenty years beginning 3 the year that the improvements to real property are first 4 assessed for taxation. 5 b. For purposes of this subsection, “improvements” means new 6 construction and rehabilitation of, and additions to, existing 7 structures. 8 c. A property tax exemption granted under paragraph 9 “a” shall apply to all taxing districts, except for school 10 districts, in which the real property is located. 11 Sec. 5. NEW SECTION . 15.543 Local government restrictions 12 —— prohibition. 13 A local government shall not impose requirements on 14 qualified projects that are inconsistent with or more 15 restrictive than provided by state or federal law, except for 16 generally applicable zoning standards that are not specifically 17 targeted at nuclear facilities. 18 Sec. 6. NEW SECTION . 15.544 Loan guarantee program. 19 1. The economic development authority, in partnership with 20 the Iowa finance authority, shall establish and administer a 21 loan guarantee program to encourage qualified small modular 22 reactor facilities to invest in qualified projects in the 23 state. 24 2. In order for a loan to be guaranteed, all of the 25 following conditions must be true: 26 a. The loan must finance a qualified project, or finance 27 acquisition or refinancing costs associated with the qualified 28 project. 29 b. A federally insured financial lending institution issued 30 the loan. 31 3. a. For a loan amount less than or equal to five hundred 32 thousand dollars, the economic development authority may 33 guarantee up to fifty percent of the loan amount. 34 b. For a loan amount greater than five hundred thousand 35 -5- LSB 6806HH (2) 91 nls/ko 5/ 9

H.F. 2550 dollars, the economic development authority may provide a 1 maximum loan guarantee of up to two hundred fifty thousand 2 dollars. 3 4. A project loan must be secured by a mortgage against the 4 project property. 5 5. The economic development authority may guarantee loans 6 for up to five years. The economic development authority 7 may extend the loan guarantee for an additional five years 8 if an underwriting review finds that an extension would be 9 beneficial. 10 6. The lender shall pay an annual loan guarantee fee as set 11 forth by rule. 12 7. The economic development authority reserves the right 13 to deny a loan guarantee for unreasonable bank loan fees or 14 interest rate. 15 8. The loan must not be insured or guaranteed by another 16 local, state, or federal guarantee program. 17 9. The loan guarantee is not transferable if the loan or the 18 qualified project is sold or transferred. 19 10. Moneys for the program may consist of any moneys 20 appropriated by the general assembly for purposes of this 21 section, and any other moneys that are lawfully available to 22 the economic development authority. 23 Sec. 7. NEW SECTION . 15.545 Federal funding. 24 The authority shall maximize the use of federal tax credits, 25 grants, and defense programs for purposes of this part. 26 Sec. 8. NEW SECTION . 15.546 Rules. 27 The authority shall adopt rules pursuant to chapter 17A to 28 administer and enforce this part. 29 Sec. 9. STATE BOARD OF REGENTS AND COMMUNITY COLLEGES —— 30 STUDY. 31 1. The state board of regents shall conduct a study 32 regarding the feasibility of creating a nuclear engineering and 33 small modular reactor operations track at institutions under 34 section 262.7. The study shall include the costs and resources 35 -6- LSB 6806HH (2) 91 nls/ko 6/ 9

H.F. 2550 necessary to create and administer a nuclear engineering and 1 small modular reactor operations track, including but not 2 limited to the cost of additional staffing, classrooms, and 3 materials. The state board of regents shall include the study 4 findings in a report submitted to the general assembly on or 5 before January 1, 2027. 6 2. The department of education shall conduct a study 7 regarding the feasibility of creating a certificate program 8 in nuclear technology, welding, and controls. The study 9 shall include the costs and resources necessary to create and 10 administer such certificate program, including but not limited 11 to the cost of additional staffing, classrooms, and materials. 12 The department of education shall include study findings in a 13 report submitted to the general assembly on or before January 14 1, 2027. 15 3. The state board of regents shall conduct a study 16 regarding the feasibility of establishing a small modular 17 reactor research hub at the Iowa state university of science 18 and technology. The study shall include the costs and 19 resources necessary to create and administer a small modular 20 reactor research hub, including but not limited to the cost of 21 additional staffing, infrastructure, and materials. The state 22 board of regents shall include the study findings in a report 23 submitted to the general assembly on or before January 1, 2027. 24 Sec. 10. CODE EDITOR DIRECTIVE. The Code editor is directed 25 to designate sections 15.540 through 15.546, as enacted in this 26 Act, as part 36 of subchapter II. 27 Sec. 11. EFFECTIVE DATE. This Act, being deemed of 28 immediate importance, takes effect upon enactment. 29 EXPLANATION 30 The inclusion of this explanation does not constitute agreement with 31 the explanation’s substance by the members of the general assembly. 32 This bill relates to small modular reactors, including the 33 establishment of the Iowa small modular reactor committee 34 within the economic development authority, financial 35 -7- LSB 6806HH (2) 91 nls/ko 7/ 9

H.F. 2550 incentives, and the potential establishment of related 1 education programs. 2 The bill establishes the Iowa small modular reactor 3 committee (committee) within the economic development authority 4 (authority), and details the responsibilities of the committee. 5 The committee shall accept, process, and approve applications 6 for qualified projects, and issue a determination on an 7 application for a qualified project no later than 180 days 8 after receipt of a completed application, unless extended for 9 good cause. Failure to deny or accept an application for 10 a qualified project within the time limit shall constitute 11 conditional approval of the application subject to safety 12 conditions. The committee may designate pre-certified small 13 modular reactor sites as permitted by federal law, and may 14 issue revenue bonds to qualified projects. 15 The bill defines “qualified project” as a small modular 16 reactor project that involves small modular reactor design, 17 licensing, or testing, fabrication or assembly, fuel handling, 18 storage, or recycling technology, power generation facilities, 19 industrial heat or hydrogen production coupled to small modular 20 reactors, and related supply chain manufacturing certified or 21 certifiable under nuclear quality standards. The bill defines 22 “small modular reactor” as a nuclear fission reactor that is 23 designed for factory fabrication and modular deployment, and 24 licensed or licensable by the United States nuclear regulatory 25 commission. 26 The bill details tax incentives for qualified projects, 27 including a research and development tax credit, a tax credit 28 for the moneys and credits tax, supplemental new jobs credit 29 from withholding, refund of the sales and use taxes, and 30 property tax exemption. 31 The bill prohibits a local government from imposing 32 requirements on qualified projects that are inconsistent with 33 or more restrictive than provided by state for federal law, 34 except for generally applicable zoning standards that are not 35 -8- LSB 6806HH (2) 91 nls/ko 8/ 9

H.F. 2550 specifically targeted at nuclear facilities. 1 Under the bill, the economic development authority, in 2 partnership with the Iowa finance authority, shall establish 3 and administer a loan guarantee program to encourage qualified 4 small modular reactor facilities to invest in qualified 5 projects in the state, as detailed in the bill. 6 The authority shall maximize the use of federal tax credits, 7 grants, and defense programs for purposes of the bill. 8 The authority shall adopt rules to administer and enforce 9 the bill. 10 The bill requires the state board of regents to conduct 11 a study regarding the feasibility of creating a nuclear 12 engineering and small modular reactor operations track at 13 institutions, including the costs and resources necessary to 14 create and administer such track, and shall include the study 15 findings in a report submitted to the general assembly on or 16 before January 1, 2027. 17 The board of education shall conduct a study regarding 18 the feasibility of creating a certificate program in nuclear 19 technology, welding, and controls, including the costs and 20 resources necessary to create and administer such certificate 21 program, and shall include the study findings in a report 22 submitted to the general assembly on or before January 1, 2027. 23 The state board of regents shall conduct a study regarding 24 the feasibility of establishing a small modular reactor 25 research hub at the Iowa state university of science and 26 technology, including the costs and resources necessary, and 27 shall include the study findings in a report submitted to the 28 general assembly on or before January 1, 2027. 29 The bill takes effect upon enactment. 30 -9- LSB 6806HH (2) 91 nls/ko 9/ 9