HF 2550 (LSB 6806HH (2) 91)

HOUSE FILE 2550

BY  THOMSON

A BILL FOR

An Act relating to small nuclear reactors, including the establishment of the Iowa modular reactor committee within the economic development authority, financial incentives, and the potential establishment of related education programs and including effective date provisions.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

    Section 1.  Section 15.522, subsection 2, Code 2026, is amended by adding the following new paragraph:
   NEW PARAGRAPH.  0l.   Small modular reactors, as that term is defined in section 15.540.
    Sec. 2.  NEW SECTION.  15.540  Definitions.
   For purposes of this part, unless the context otherwise requires:
   1.  “Committee” means the Iowa small modular reactor committee established in section 15.541.
   2.  “Qualified project” means a small modular reactor project that involves any of the following:
   a.  Small modular reactor design, licensing, or testing.
   b.  Small modular reactor fabrication or assembly.
   c.  Small modular reactor fuel handling, storage, or recycling technology.
   d.  Small modular reactor power generation facilities.
   e.  Industrial heat or hydrogen production coupled to small modular reactors.
   f.  Small modular reactor-related supply chain manufacturing, certified or certifiable under nuclear quality standards.
   3.  “Small modular reactor” means a nuclear fission reactor that meets all of the following requirements:
   a.  The small modular reactor is designed for factory fabrication and modular deployment.
   b.  The small modular reactor is licensed or licensable by the United States nuclear regulatory commission.
    Sec. 3.  NEW SECTION.  15.541  Iowa small modular reactor committee.
   1.  The Iowa small modular reactor committee is established within the authority. The committee shall do all of the following:
   a.  Serve as the statewide coordinating entity for small modular reactor development.
   b.  Act as a permitting and interagency coordination office as permitted by federal law.
   c.  Designate small modular reactor priority development zones for purposes of this section.
   d.  Administer financial incentives for purposes of this section.
   e.  Coordinate workforce, research, and education initiatives for purposes of this section.
   f.  Market Iowa nationally and internationally as a small modular reactor hub.
   g.  Enter into public-private partnerships for purposes of this section.
   2.  The committee shall accept, process, and approve applications for qualified projects. The committee shall issue a determination on an application for a qualified project no later than one hundred eighty calendar days after receipt of a completed application, unless extended for good cause. Failure to deny or accept an application for a qualified project within the time limit shall constitute conditional approval of the application, subject to safety conditions.
   3.  The committee may designate pre-certified small modular reactor sites as permitted by federal law including but not limited to any of the following:
   a.  Brownfields.
   b.  Retired fossil fuel generation sites.
   c.  Industrial campuses.
   d.  State owned land.
   4.  The committee may issue revenue bonds to qualified projects from the revenue bonds capitals fund created in section 12.88, subject to appropriation by the Iowa finance authority and subject to approval of the economic development authority.
    Sec. 4.  NEW SECTION.  15.542  Qualified project tax incentives.
   1.  a.  For tax years beginning on or after January 1, 2027, a tax credit shall be allowed against the taxes imposed in chapter 422, subchapters II, III, and V, and in chapter 432, and against the moneys and credits tax imposed in section 533.329, for a portion of a taxpayer’s qualified capital investment in a qualified project.
   b.  An individual may claim a tax credit under this section as a partnership, limited liability company, S corporation, estate, or trust electing to have income taxed directly to the individual. The amount claimed by the individual shall be based upon the pro rata share of the individual’s earnings from the partnership, limited liability company, S corporation, estate, or trust.
   c.  An individual affiliated with a qualified project shall not be eligible for a tax credit under this section.
   d.  In lieu of claiming a refund, a taxpayer may elect to have the overpayment shown on the taxpayer’s final, completed return credited to the tax liability for the immediately succeeding tax year.
   e.  The amount of the tax credit shall equal thirty percent of the taxpayer’s qualified capital investment in a qualified project.
   f.  A tax credit shall not be transferred to any other person.
   g.  The authority shall develop a system for registration and issuance of tax credits authorized pursuant to this subsection and shall control distribution of all tax credit certificates to investors pursuant to this subsection. The authority shall develop rules for the qualification and administration of qualified projects. The department of revenue shall adopt rules pursuant to chapter 17A as necessary for the administration of this subsection.
   2.  A qualified small modular reactor facility responsible for a qualified project may enter into an agreement with the authority for a supplemental new jobs credit from withholding from jobs created under the qualified project. The agreement shall provide that a new jobs credit from withholding in an amount equal to one and one-half percent of the gross wages paid by the qualified small modular reactor facility pursuant to section 422.16 is authorized to fund the qualified project.
   3.  a.  A qualified small modular reactor facility responsible for a qualified project may claim a refund of the sales and use taxes paid under chapter 423 prior to the completion of the qualified project that are directly related to a qualified project and specified in an agreement between the qualified small modular reactor facility and the authority.
   b.  To receive a refund, a claim shall be filed by a qualified small modular reactor facility with the department of revenue as follows:
   (1)  The qualified small modular reactor facility shall state under oath, on forms provided by the department of revenue, the amount of sales and use taxes paid under chapter 423 prior to the completion of the qualified project that are directly related to a qualified project and specified in the agreement.
   (2)  The qualified small modular reactor facility shall, after the agreement completion date, make application to the department of revenue for any refund of the amount of sales and use taxes paid under chapter 423 prior to the completion of the qualified project that were directly related to a qualified project and specified in the agreement. The application shall be made in the manner and upon forms to be provided by the department of revenue. The department of revenue shall audit the claim and, if approved, issue a warrant to the qualified small modular reactor facility. The application must be made within one year after the agreement completion date. A claim filed in accordance with this subsection shall not be denied by reason of a time limitation for filing a refund claim set forth in section 423.47.
   4.  a.  A community in which a qualified small modular reactor facility is located may grant the qualified small modular reactor facility a property tax exemption for a portion of the actual value added by improvements to real property directly related to the qualified small modular reactor facility’s created jobs. The community may allow a property tax exemption for a period not to exceed twenty years beginning the year that the improvements to real property are first assessed for taxation.
   b.  For purposes of this subsection, “improvements” means new construction and rehabilitation of, and additions to, existing structures.
   c.  A property tax exemption granted under paragraph “a” shall apply to all taxing districts, except for school districts, in which the real property is located.
    Sec. 5.  NEW SECTION.  15.543  Local government restrictions —— prohibition.
   A local government shall not impose requirements on qualified projects that are inconsistent with or more restrictive than provided by state or federal law, except for generally applicable zoning standards that are not specifically targeted at nuclear facilities.
    Sec. 6.  NEW SECTION.  15.544  Loan guarantee program.
   1.  The economic development authority, in partnership with the Iowa finance authority, shall establish and administer a loan guarantee program to encourage qualified small modular reactor facilities to invest in qualified projects in the state.
   2.  In order for a loan to be guaranteed, all of the following conditions must be true:
   a.  The loan must finance a qualified project, or finance acquisition or refinancing costs associated with the qualified project.
   b.  A federally insured financial lending institution issued the loan.
   3.  a.  For a loan amount less than or equal to five hundred thousand dollars, the economic development authority may guarantee up to fifty percent of the loan amount.
   b.  For a loan amount greater than five hundred thousand dollars, the economic development authority may provide a maximum loan guarantee of up to two hundred fifty thousand dollars.
   4.  A project loan must be secured by a mortgage against the project property.
   5.  The economic development authority may guarantee loans for up to five years. The economic development authority may extend the loan guarantee for an additional five years if an underwriting review finds that an extension would be beneficial.
   6.  The lender shall pay an annual loan guarantee fee as set forth by rule.
   7.  The economic development authority reserves the right to deny a loan guarantee for unreasonable bank loan fees or interest rate.
   8.  The loan must not be insured or guaranteed by another local, state, or federal guarantee program.
   9.  The loan guarantee is not transferable if the loan or the qualified project is sold or transferred.
   10.  Moneys for the program may consist of any moneys appropriated by the general assembly for purposes of this section, and any other moneys that are lawfully available to the economic development authority.
    Sec. 7.  NEW SECTION.  15.545  Federal funding.
   The authority shall maximize the use of federal tax credits, grants, and defense programs for purposes of this part.
    Sec. 8.  NEW SECTION.  15.546  Rules.
   The authority shall adopt rules pursuant to chapter 17A to administer and enforce this part.
    Sec. 9.  STATE BOARD OF REGENTS AND COMMUNITY COLLEGES —— STUDY.
   1.  The state board of regents shall conduct a study regarding the feasibility of creating a nuclear engineering and small modular reactor operations track at institutions under section 262.7. The study shall include the costs and resources necessary to create and administer a nuclear engineering and small modular reactor operations track, including but not limited to the cost of additional staffing, classrooms, and materials. The state board of regents shall include the study findings in a report submitted to the general assembly on or before January 1, 2027.
   2.  The department of education shall conduct a study regarding the feasibility of creating a certificate program in nuclear technology, welding, and controls. The study shall include the costs and resources necessary to create and administer such certificate program, including but not limited to the cost of additional staffing, classrooms, and materials. The department of education shall include study findings in a report submitted to the general assembly on or before January 1, 2027.
   3.  The state board of regents shall conduct a study regarding the feasibility of establishing a small modular reactor research hub at the Iowa state university of science and technology. The study shall include the costs and resources necessary to create and administer a small modular reactor research hub, including but not limited to the cost of additional staffing, infrastructure, and materials. The state board of regents shall include the study findings in a report submitted to the general assembly on or before January 1, 2027.
    Sec. 10.  CODE EDITOR DIRECTIVE.  The Code editor is directed to designate sections 15.540 through 15.546, as enacted in this Act, as part 36 of subchapter II.
    Sec. 11.  EFFECTIVE DATE.  This Act, being deemed of immediate importance, takes effect upon enactment.
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 small modular reactors, including the establishment of the Iowa small modular reactor committee within the economic development authority, financial incentives, and the potential establishment of related education programs.
   The bill establishes the Iowa small modular reactor committee (committee) within the economic development authority (authority), and details the responsibilities of the committee. The committee shall accept, process, and approve applications for qualified projects, and issue a determination on an application for a qualified project no later than 180 days after receipt of a completed application, unless extended for good cause. Failure to deny or accept an application for a qualified project within the time limit shall constitute conditional approval of the application subject to safety conditions. The committee may designate pre-certified small modular reactor sites as permitted by federal law, and may issue revenue bonds to qualified projects.
   The bill defines “qualified project” as a small modular reactor project that involves small modular reactor design, licensing, or testing, fabrication or assembly, fuel handling, storage, or recycling technology, power generation facilities, industrial heat or hydrogen production coupled to small modular reactors, and related supply chain manufacturing certified or certifiable under nuclear quality standards. The bill defines “small modular reactor” as a nuclear fission reactor that is designed for factory fabrication and modular deployment, and licensed or licensable by the United States nuclear regulatory commission.
   The bill details tax incentives for qualified projects, including a research and development tax credit, a tax credit for the moneys and credits tax, supplemental new jobs credit from withholding, refund of the sales and use taxes, and property tax exemption.
   The bill prohibits a local government from imposing requirements on qualified projects that are inconsistent with or more restrictive than provided by state for federal law, except for generally applicable zoning standards that are not specifically targeted at nuclear facilities.
   Under the bill, the economic development authority, in partnership with the Iowa finance authority, shall establish and administer a loan guarantee program to encourage qualified small modular reactor facilities to invest in qualified projects in the state, as detailed in the bill.
   The authority shall maximize the use of federal tax credits, grants, and defense programs for purposes of the bill.
   The authority shall adopt rules to administer and enforce the bill.
   The bill requires the state board of regents to conduct a study regarding the feasibility of creating a nuclear engineering and small modular reactor operations track at institutions, including the costs and resources necessary to create and administer such track, and shall include the study findings in a report submitted to the general assembly on or before January 1, 2027.
   The board of education shall conduct a study regarding the feasibility of creating a certificate program in nuclear technology, welding, and controls, including the costs and resources necessary to create and administer such certificate program, and shall include the study findings in a report submitted to the general assembly on or before January 1, 2027.
   The state board of regents shall conduct a study regarding the feasibility of establishing a small modular reactor research hub at the Iowa state university of science and technology, including the costs and resources necessary, and shall include the study findings in a report submitted to the general assembly on or before January 1, 2027.
   The bill takes effect upon enactment.