H.F. _____ Section 1. Section 15.491, Code 2026, is amended by adding 1 the following new subsections: 2 NEW SUBSECTION . 1A. “Affiliate” means the same as defined 3 in section 423.1. 4 NEW SUBSECTION . 24A. “Rural county” means a county in this 5 state with a population of fifty thousand persons or less based 6 on the most recent decennial census released by the United 7 States bureau of census. 8 Sec. 2. Section 15.492, subsection 1, paragraph a, Code 9 2026, is amended by striking the paragraph and inserting in 10 lieu thereof the following: 11 a. (1) (a) For a business’s proposed project receiving 12 tax credits under section 15.496, subsection 1, paragraph “a” , 13 subparagraph (1), the project must be located on a site where 14 the business has a controlling interest in or located on a 15 certified site greater than two hundred fifty acres. 16 (b) For a business’s proposed project receiving tax credits 17 under section 15.496, subsection 1, paragraph “a” , subparagraph 18 (2), the business’s proposed project must be located on a site 19 where the business has a controlling interest in or a certified 20 site greater than two hundred fifty acres or the business must 21 document to the authority that the business has completed a 22 site evaluation commensurate with a certified site. 23 (2) The authority determines that the site is suitable for 24 the project. 25 Sec. 3. Section 15.494, subsection 1, paragraph b, Code 26 2026, is amended to read as follows: 27 b. If the eligible business fails to comply with any 28 requirements of the program or the agreement as determined 29 by the authority, the eligible business may be required to 30 repay any tax incentives the authority issued to the eligible 31 business. After a final determination, the authority shall 32 notify the department of revenue of any required repayment 33 of a tax incentive. Any repayment , including repayment for 34 which an affiliate of the eligible business is liable, shall be 35 -1- LSB 6980YC (1) 91 jm/jh 1/ 14

H.F. _____ considered a tax payment due and payable to the department of 1 revenue by any taxpayer that claimed the tax incentive, and the 2 failure to make the repayment may be treated by the department 3 of revenue in the same manner as a failure to pay the tax shown 4 due, or required to be shown due, with the filing of a return or 5 deposit form. In addition, the county shall have the authority 6 to take action to recover the value of property taxes not 7 collected as a result of the exemption provided to the business 8 under this part . 9 Sec. 4. Section 15.496, Code 2026, is amended to read as 10 follows: 11 15.496 Qualifying investment tax credit. 12 1. a. The authority may authorize a either, but not both, 13 of the following: 14 (1) A tax credit for an up to two eligible business 15 businesses that is up to five percent of the each eligible 16 business’s qualifying investment. The authority shall not 17 issue a tax credit certificate to the eligible business until 18 the eligible business’s project has been placed in service or 19 until a designated portion of the project has been placed in 20 service , and at least fifty percent of the created jobs the 21 eligible business agreed to in associated with the project or 22 a designated portion of the project pursuant to the agreement 23 under section 15.494 have been added to the eligible business’s 24 payroll , and that the jobs pay at least one hundred forty 25 percent of the qualifying wage threshold , have been added to 26 the eligible business’s payroll . The department of revenue 27 shall remit the tax credit to the eligible business under this 28 subparagraph equally over five tax years. 29 (2) (a) A tax credit for one eligible business that is up 30 to ten percent of the eligible business’s qualifying investment 31 that is located in a rural county. The authority shall not 32 issue a tax credit certificate to the eligible business until 33 the eligible business’s project has been placed in service or 34 until a designated portion of the eligible business’s project 35 -2- LSB 6980YC (1) 91 jm/jh 2/ 14

H.F. _____ has been placed in service, and at least fifty percent of 1 the created jobs associated with the project or a designated 2 portion of the project pursuant to the agreement under section 3 15.494 have been added to the eligible business’s payroll, 4 and the jobs pay at least one hundred forty percent of the 5 qualifying wage threshold. The department of revenue shall 6 remit the tax credit to the eligible business under this 7 subparagraph equally over ten tax years. 8 (b) (i) Tax credit certificates issued under this 9 subparagraph are refundable and may be transferred to another 10 person or entity, subject to the approval of the authority. 11 Prior to approving a transfer, the authority shall verify that 12 the transferee is not associated with a foreign adversary or 13 foreign adversary entity. Within ninety days of transfer, the 14 transferee shall submit the transferred tax credit certificate 15 to the department of revenue along with a statement containing 16 the transferee’s name, tax identification number, and address; 17 the denomination that each replacement tax credit certificate 18 is to carry; and any other information required by the 19 department of revenue. 20 (ii) Within thirty days of receiving the transferred 21 tax credit certificate and the transferee’s statement, the 22 department of revenue shall issue one or more replacement tax 23 credit certificates to the transferee. Each replacement tax 24 credit certificate must contain the information required for 25 the original tax credit certificate and must have the same 26 expiration date that appeared in the transferred tax credit 27 certificate. 28 (iii) A tax credit shall not be claimed by a transferee 29 under this subparagraph until a replacement tax credit 30 certificate identifying the transferee as the proper holder 31 has been issued. The transferee may use the amount of the 32 tax credit transferred against the taxes for any tax year the 33 original transferor could have claimed the tax credit. Any 34 credit in excess of the tax liability of the transferee for the 35 -3- LSB 6980YC (1) 91 jm/jh 3/ 14

H.F. _____ tax year is refundable or, at the election of the transferee, 1 may be credited to the tax liability of the transferee in 2 any of the following ten consecutive tax years or until 3 depleted, whichever occurs first. Any consideration received 4 for the transfer of the tax credit shall not be included as 5 income under chapter 422, subchapters II, III, and V. Any 6 consideration paid for the transfer of the tax credit shall not 7 be deducted from income under chapter 422, subchapters II, III, 8 and V. 9 (iv) This subparagraph division does not apply to 10 agreements entered into after December 31, 2027. 11 b. The tax credit shall be allowed against taxes imposed 12 under chapter 422, subchapter II , III , or V , and chapter 432, 13 and against the moneys and credits tax imposed in section 14 533.329 . If the eligible business is a partnership, S 15 corporation, limited liability company, cooperative organized 16 under chapter 501 and filing as a partnership for federal tax 17 purposes, or estate or trust electing to have the income taxed 18 directly to the individual, an individual may claim the tax 19 credit allowed. The amount claimed by the individual shall 20 be based upon the pro rata share of the individual’s earnings 21 of the partnership, S corporation, limited liability company, 22 cooperative organized under chapter 501 and filing as a 23 partnership for federal tax purposes, or estate or trust. Any 24 c. (1) For any tax credit authorized pursuant to paragraph 25 “a” , subparagraph (1), in excess of the eligible business’s tax 26 liability for the tax year may be refunded or, at the eligible 27 business’s election, may be credited to the eligible business’s 28 tax liability in any of the following five consecutive tax 29 years or until depleted, whichever occurs first. 30 (2) For any tax credit authorized pursuant to paragraph 31 “a” , subparagraph (2), in excess of the eligible business’s tax 32 liability for the tax year may be refunded or, at the eligible 33 business’s election, may be credited to the eligible business’s 34 tax liability in any of the following ten tax years or until 35 -4- LSB 6980YC (1) 91 jm/jh 4/ 14

H.F. _____ depleted, whichever occurs first. 1 (3) The eligible business shall make such election prior to 2 the authority issuing a tax credit certificate to the eligible 3 business, and the eligible business’s election shall be noted 4 on the tax credit certificate. A tax credit shall not be 5 carried back to a tax year prior to the tax year in which the 6 tax credit is first claimed by the eligible business. 7 2. a. If an eligible business obtains a tax credit 8 certificate from the authority by way of a prohibited activity, 9 the eligible business and any transferee of a tax credit 10 certificate shall be jointly and severally liable to the state 11 for the amount of the tax credit issued, interest and penalties 12 allowed under chapter 422, and reasonable attorney fees and 13 litigation costs, except that the liability of the transferee 14 shall not exceed an amount equal to the amount of the tax 15 credit acquired by the transferee. The department of revenue, 16 upon notification or discovery that a tax credit certificate 17 was issued to an eligible business by way of a prohibited 18 activity, shall revoke any outstanding tax credit and seek 19 repayment of the value of any tax credit already claimed, and 20 the failure to make such a repayment may be treated by the 21 department of revenue in the same manner as a failure to pay 22 the tax shown due or required to be shown due with the filing 23 of a return or deposit form. However, a qualifying transferee 24 of a tax credit certificate is not subject to the liability, 25 revocation, and repayment imposed under this paragraph. 26 b. For purposes of this subsection: 27 (1) “Control” means when a person, directly or indirectly or 28 acting through or together with one or more persons, satisfies 29 any of the following: 30 (a) Owns, controls, or has the power to vote fifty percent 31 or more of any class of voting securities or voting membership 32 interests of another person. 33 (b) Controls, in any manner, the election of a majority of 34 the directors, managers, trustees, or other persons exercising 35 -5- LSB 6980YC (1) 91 jm/jh 5/ 14

H.F. _____ similar functions of another person. 1 (c) Has the power to exercise a controlling influence over 2 the management or policies of another person. 3 (2) “Prohibited activity” means a breach or default under 4 the agreement with the authority, the violation of any warranty 5 provided by the eligible business to the authority or the 6 department of revenue, the claiming of a tax credit issued 7 under this section for expenditures that are not a qualifying 8 investment, misrepresentation, fraud, a violation of any other 9 requirements or rules of this part, or any other unlawful act 10 or omission. 11 (3) “Qualifying transferee” means a transferee who acquires 12 a tax credit certificate issued under this section for 13 value, in good faith, without express or implied notice of a 14 prohibited activity of the eligible business who was originally 15 issued the tax credit, and without express or implied notice 16 of any other claim to or defense against the tax credit, and 17 which transferee is not associated with the eligible business 18 by being one or more of the following: 19 (a) An owner, member, shareholder, or partner of the 20 eligible business who directly or indirectly owns and controls, 21 in whole or in part, the eligible business. 22 (b) A director, officer, or employee of the eligible 23 business. 24 (c) A relative of the eligible business or a person listed 25 in subparagraph division (a) or (b) or, if the eligible 26 business or an owner, member, shareholder, or partner of the 27 eligible business is a legal entity, the natural persons who 28 ultimately own such legal entity. 29 (d) A person who is owned or controlled, in whole or in 30 part, by a person listed in subparagraph division (a) or (b). 31 (4) “Relative” means an individual related by consanguinity 32 within the second degree as determined by common law, a spouse, 33 or an individual related to a spouse within the second degree 34 as determined by common law, and includes an individual in an 35 -6- LSB 6980YC (1) 91 jm/jh 6/ 14

H.F. _____ adoptive relationship within the second degree. 1 2. 3. If For an eligible business receiving a tax credit 2 under subsection 1, paragraph “a” , subparagraph (1), if within 3 five years of the date the authority issues an the eligible 4 business a tax credit under subsection 1 , the eligible business 5 sells, disposes of, razes, or otherwise renders unusable all 6 or a part of the land, buildings, or other structures for 7 which the tax credit was claimed under this section , the tax 8 liability of the eligible business for the year in which all or 9 part of the land, buildings, or other existing structures are 10 sold, disposed of, razed, or otherwise rendered unusable shall 11 be increased by one of the following amounts: 12 a. One hundred percent of the tax credit claimed under 13 this section if all or a part of the land, buildings, or other 14 structures for which the tax credit was claimed under this 15 section cease to be eligible for the tax credit within one 16 year after the date the authority issued the tax credit to the 17 eligible business. 18 b. Eighty percent of the tax credit claimed under this 19 section if all or a part of the land, buildings, or other 20 structures for which the tax credit was claimed under this 21 section cease to be eligible for the tax credit within two 22 years after the date the authority issued the tax credit to the 23 eligible business. 24 c. Sixty percent of the tax credit claimed under this 25 section if all or a part of the land, buildings, or other 26 structures for which the tax credit was claimed under this 27 section cease to be eligible for the tax credit within three 28 years after the date the authority issued the tax credit to the 29 eligible business. 30 d. Forty percent of the tax credit claimed under this 31 section if all or a part of the land, buildings, or other 32 structures for which the tax credit was claimed under this 33 section cease to be eligible for the tax credit within four 34 years after the date the authority issued the tax credit to the 35 -7- LSB 6980YC (1) 91 jm/jh 7/ 14

H.F. _____ eligible business. 1 e. Twenty percent of the tax credit claimed under this 2 section if all or a part of the land, buildings, or other 3 structures for which the tax credit was claimed under this 4 section cease to be eligible for the tax credit within five 5 years after the date the authority issued the tax credit to the 6 eligible business. 7 4. For an eligible business receiving a tax credit under 8 subsection 1, paragraph “a” , subparagraph (2), if within ten 9 years of the date the authority issues an eligible business a 10 tax credit under subsection 1, the eligible business sells, 11 disposes of, razes, or otherwise renders unusable all or a part 12 of the land, buildings, or other structures for which the tax 13 credit was claimed by any taxpayer under this section, the tax 14 liability of the eligible business for the year in which all or 15 part of the land, buildings, or other existing structures are 16 sold, disposed of, razed, or otherwise rendered unusable shall 17 be increased by one of the following amounts: 18 a. One hundred percent of the tax credit claimed under 19 this section if all or a part of the land, buildings, or other 20 structures for which the tax credit was claimed under this 21 section cease to be eligible for the tax credit within one 22 year after the date the authority issued the tax credit to the 23 eligible business. 24 b. Ninety percent of the tax credit claimed under this 25 section if all or a part of the land, buildings, or other 26 structures for which the tax credit was claimed under this 27 section cease to be eligible for the tax credit within two 28 years after the date the authority issued the tax credit to the 29 eligible business. 30 c. Eighty percent of the tax credit claimed under this 31 section if all or a part of the land, buildings, or other 32 structures for which the tax credit was claimed under this 33 section cease to be eligible for the tax credit within three 34 years after the date the authority issued the tax credit to the 35 -8- LSB 6980YC (1) 91 jm/jh 8/ 14

H.F. _____ eligible business. 1 d. Seventy percent of the tax credit claimed under this 2 section if all or a part of the land, buildings, or other 3 structures for which the tax credit was claimed under this 4 section cease to be eligible for the tax credit within four 5 years after the date the authority issued the tax credit to the 6 eligible business. 7 e. Sixty percent of the tax credit claimed under this 8 section if all or a part of the land, buildings, or other 9 structures for which the tax credit was claimed under this 10 section cease to be eligible for the tax credit within five 11 years after the date the authority issued the tax credit to the 12 eligible business. 13 f. Fifty percent of the tax credit claimed under this 14 section if all or a part of the land, buildings, or other 15 structures for which the tax credit was claimed under this 16 section cease to be eligible for the tax credit within six 17 years after the date the authority issued the tax credit to the 18 eligible business. 19 g. Forty percent of the tax credit claimed under this 20 section if all or a part of the land, buildings, or other 21 structures for which the tax credit was claimed under this 22 section cease to be eligible for the tax credit within seven 23 years after the date the authority issued the tax credit to the 24 eligible business. 25 h. Thirty percent of the tax credit claimed under this 26 section if all or a part of the land, buildings, or other 27 structures for which the tax credit was claimed under this 28 section cease to be eligible for the tax credit within eight 29 years after the date the authority issued the tax credit to the 30 eligible business. 31 i. Twenty percent of the tax credit claimed under this 32 section if all or a part of the land, buildings, or other 33 structures for which the tax credit was claimed under this 34 section cease to be eligible for the tax credit within nine 35 -9- LSB 6980YC (1) 91 jm/jh 9/ 14

H.F. _____ years after the date the authority issued the tax credit to the 1 eligible business. 2 j. Ten percent of the tax credit claimed under this section 3 if all or a part of the land, buildings, or other structures 4 for which the tax credit was claimed under this section cease 5 to be eligible for the tax credit within ten years after 6 the date the authority issued the tax credit to the eligible 7 business. 8 Sec. 5. Section 15.498, subsection 1, paragraph c, Code 9 2026, is amended to read as follows: 10 c. The agricultural land for which the exemption is provided 11 is a mega site or included in a mega site or the eligible 12 business documents to the satisfaction of the authority 13 that the eligible business has completed a site evaluation 14 commensurate with a certified site . 15 Sec. 6. Section 15.501, Code 2026, as amended by 2026 16 Iowa Acts, House File 2799, section 14, is amended to read as 17 follows: 18 15.501 Restrictions on board. 19 The board shall not authorize tax incentives available under 20 the program, or an exemption to restrictions on agricultural 21 land holdings pursuant to this part , for more than two eligible 22 businesses, or one eligible business if issued a credit 23 pursuant to section 15.496, subsection 1, paragraph “a” , 24 subparagraph (2), or on or after January 1, 2030, whichever 25 occurs first. 26 Sec. 7. NEW SECTION . 432.12P Major economic growth 27 attraction program tax credit. 28 The taxes imposed under this chapter shall be reduced by 29 investment tax credits authorized pursuant to section 15.496. 30 Sec. 8. EFFECTIVE DATE. This Act, being deemed of immediate 31 importance, takes effect upon enactment. 32 EXPLANATION 33 The inclusion of this explanation does not constitute agreement with 34 the explanation’s substance by the members of the general assembly. 35 -10- LSB 6980YC (1) 91 jm/jh 10/ 14

H.F. _____ This bill modifies the major economic growth attraction 1 program (program). 2 The program provides tax incentives for an eligible business 3 (business) that makes a qualifying investment in the state 4 in excess of $1 billion. A “qualifying investment” means a 5 capital investment in real property, including the purchase 6 price of the land, site preparation, infrastructure, and 7 building construction for use in the operation of a business. 8 A “qualifying investment” also means a capital investment in 9 depreciable assets for use in the operation of a business. 10 The bill changes the tax incentives in the program available 11 for a business commencing a project in a rural county. The 12 bill defines a rural county to mean a county with a population 13 of 50,000 persons or less based upon the most recent federal 14 decennial census. 15 Under the bill, the economic development authority 16 (authority) may authorize a tax credit for a business that 17 is up to 10 percent of the business’s qualifying investment 18 located in a rural county. The tax credit shall be remitted to 19 the business equally over a 10-year period. 20 The bill specifies the authority shall not issue a tax credit 21 certificate to the business until the business’s project has 22 been placed in service or until a designated portion of the 23 business’s project has been placed in service, and at least 24 50 percent of the created jobs associated with the project 25 or a designated portion of the project that pay at least 140 26 percent of the qualifying wage threshold have been added to the 27 business’s payroll. 28 A tax credit certificate issued to a business located in a 29 rural county is refundable and transferable to another person 30 or entity, subject to the approval by the authority. Prior 31 to approving the transfer, the authority shall verify that 32 the transferee is not associated with a foreign adversary 33 or foreign adversary entity. Any credit in excess may 34 also be credited to the tax liability of the business or 35 -11- LSB 6980YC (1) 91 jm/jh 11/ 14

H.F. _____ transferee of the credit for up to 10 consecutive tax years 1 or until depleted, whichever occurs first. The bill sets 2 out requirements for the transferability of a tax credit 3 certificate, including the transferee submitting the tax 4 credit to the department of revenue (department) within 90 5 days of the transfer along with the transferee’s name and 6 tax identification number. The bill requires the department 7 to reissue a replacement tax credit to the transferee within 8 30 days, and each replacement tax credit must contain the 9 information required for the original tax credit certificate 10 including the same expiration date. 11 Under current law, if a business fails to comply with any 12 requirements of the program, the business may be required to 13 repay any tax incentives and the repayment shall be considered 14 a tax payment due. The bill specifies any repayment of tax 15 incentives may include any repayment an affiliate of the 16 business is liable for and the repayment shall be considered a 17 tax payment due. The bill defines “affiliate” to mean the same 18 as defined in Code section 423.1. 19 If a business obtains a tax credit certificate from the 20 authority by way of a prohibited activity, the bill makes 21 the business and any transferee of a tax credit certificate 22 jointly and severally liable to the state for the amount of 23 the tax credits issued, interest and penalties, reasonable 24 attorney fees, and litigation costs, except that the liability 25 of the transferee shall not exceed an amount equal to the 26 amount of the tax credits acquired by the transferee. However, 27 a qualifying transferee of a tax credit certificate is not 28 subject to the liability, revocation, and repayment imposed in 29 the bill. 30 The bill defines “qualifying transferee” to mean a 31 transferee who acquires a tax credit certificate in good faith, 32 without notice of any prohibited activity, and who is not 33 associated with the business. The bill further defines persons 34 who are considered associated with the business to include 35 -12- LSB 6980YC (1) 91 jm/jh 12/ 14

H.F. _____ owners and family members of the owners of the business. 1 The bill defines “prohibited activity” to mean a breach or 2 default under the agreement with the authority, the violation 3 of any warranty provided by the business to the authority or 4 the department, the claiming of a tax credit for expenditures 5 that are not a qualifying investment, the violation of any 6 requirements of the program, misrepresentation, fraud, or any 7 other unlawful act or omission. 8 The bill prohibits a transferee of the tax credit 9 certificate from claiming the tax credit until a replacement 10 tax credit has been issued. The transferee may use the tax 11 credit transferred against the taxes for any tax year the 12 original transferor could claim the credit. 13 The bill prohibits the transferability of tax credits for 14 agreements entered into after December 31, 2027. 15 Under current law, if a business receives a five-year 16 tax credit and then sells or otherwise renders the land or 17 buildings unusable within five years of receiving the tax 18 credit, the business is liable to the state for a portion of 19 the tax savings achieved from the tax credit. Due to the 20 possible extension of the tax credit to 10 years for a business 21 making a qualifying investment in a rural county, the bill 22 expands the time period of owing a portion of the tax savings 23 achieved to 10 years, if such a business sells or otherwise 24 renders the land or buildings unusable. 25 The bill specifies any consideration received for the 26 transfer shall not be considered as income by the transferor 27 and any consideration from the transfer of the tax credit shall 28 not be deducted from income by the transferee. 29 Under current law and in the bill, a business is also 30 eligible for sales and use tax refunds, withholding tax 31 credits, and property tax exemptions, if granted from the 32 community where the project is located. 33 Currently, the tax credits are allowed against the taxes 34 imposed under Code chapter 422, subchapter II (personal 35 -13- LSB 6980YC (1) 91 jm/jh 13/ 14

H.F. _____ income), subchapter III (corporate income), subchapter V 1 (franchise), and the moneys and credits tax (credit unions). 2 The bill also allows the credit against the taxes imposed under 3 Code chapter 432 (tax on insurance premiums). 4 Currently, the authority may authorize tax incentives under 5 the program for up to two businesses by January 1, 2030. The 6 bill changes the number of qualifying projects that may be 7 authorized by the authority by January 1, 2030, to include 8 authorizing a tax credit that is up to 10 percent of the 9 qualifying investment to one business with a project in a 10 rural county in lieu of authorizing up to two other businesses 11 for a tax credit that is up to 5 percent of the qualifying 12 investment. 13 The bill takes effect upon enactment. 14 -14- LSB 6980YC (1) 91 jm/jh 14/ 14