Senate File 2301 - Introduced SENATE FILE 2301 BY COMMITTEE ON COMMERCE (SUCCESSOR TO SSB 3103) A BILL FOR An Act relating to matters under the purview of the economic 1 development authority, the utilities commission, and 2 the department of education, including creation of the 3 headquarters expansion and development for growth and 4 employment program, and the business incentives for growth 5 program training fund; repeal of the new jobs tax credit 6 program; the major economic growth attraction program; load 7 forecasting and analysis of electric transmission system 8 expansion plans; creation of the electric transmission 9 system expansion planning and analysis and load forecasting 10 fund; the industrial new jobs training program; and 11 including effective date provisions. 12 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 13 TLSB 5472SV (2) 91 nls/ko

S.F. 2301 DIVISION I 1 HEADQUARTERS EXPANSION AND DEVELOPMENT FOR GROWTH EMPLOYMENT 2 PROGRAM 3 Section 1. NEW SECTION . 15.600 Short title. 4 This part shall be known and may be cited as the 5 “Headquarters Expansion and Development for Growth and Employment 6 Program” , or “EDGE Program” . 7 Sec. 2. NEW SECTION . 15.601 Definitions. 8 As used in this part, unless the context otherwise requires: 9 1. “Agreement” means an agreement entered into by an 10 eligible business and the authority pursuant to section 15.604. 11 2. “Base employment level” means the same as defined in 12 section 15.491. 13 3. “Benefits” means nonwage compensation provided to an 14 employee. “Benefits” include medical and dental insurance, a 15 pension, a retirement plan, a profit-sharing plan, child care, 16 life insurance, vision insurance, and disability insurance. 17 4. “Community” means a city or county in the state. 18 5. “Corporate headquarters” means a location in the 19 state that serves as the principal executive office or 20 houses the core administrative operations for a business, 21 and that includes executive leadership offices, strategic 22 decision-making functions, and administrative and support staff 23 employees. 24 6. “Corporate job” means a position based at a corporate 25 headquarters that involves strategic planning, executive 26 decision-making, or core administrative functions. 27 7. “Created jobs” or “create jobs” means new, permanent, 28 full-time equivalent positions added to an eligible business’s 29 payroll, at the location of the eligible business’s project, in 30 excess of the eligible business’s base employment level. 31 8. “Data center business” means the same as defined in 32 section 423.3, subsection 95. 33 9. “Eligible business” means a business that meets the 34 requirements of section 15.602. 35 -1- LSB 5472SV (2) 91 nls/ko 1/ 19

S.F. 2301 10. “Full-time equivalent position” means a non-part-time 1 position for the number of hours or days per week considered 2 to be full-time work for the kind of service or work performed 3 for an employer. Typically, a full-time equivalent position 4 requires two thousand eighty hours of work in a calendar year, 5 including all paid holidays, vacations, sick time, and other 6 paid leave. 7 11. “Gross annual wages” means all regular wages and 8 salaries received by an employee for performing services as 9 an employee of an employer. “Gross annual wages” does not 10 include nonregular forms of compensation, such as bonuses, 11 unusual overtime pay, commissions, stock options, pensions, 12 retirement or death benefits, unemployment benefits, life or 13 other insurance, or other fringe benefits. 14 12. “New corporate job” means a corporate job that is a 15 created job. 16 13. “Program” means the headquarters expansion and 17 development for growth and employment program. 18 14. “Project” means an activity or set of activities 19 directly related to the retention or location of a corporate 20 headquarters for an eligible business, proposed in an eligible 21 business’s application to the program, that will accomplish the 22 goals of the program. 23 15. “Qualifying wage threshold” means the mean wage level 24 represented by the wages within two standard deviations of 25 the mean wage within the laborshed area in which the eligible 26 business is located, as calculated by the authority by rule, 27 using the most current covered wage and employment data 28 available from the department of workforce development for the 29 laborshed area in which the eligible business is located. 30 16. “Retained corporate job” means a corporate job that is 31 also a retained job. 32 17. “Retained jobs” means a full-time equivalent position 33 that is in existence at the time an eligible business applies 34 for the program that remains continuously filled, and that is 35 -2- LSB 5472SV (2) 91 nls/ko 2/ 19

S.F. 2301 at risk of elimination if the proposed project for which the 1 eligible business is applying to the program does not proceed. 2 18. “Tax incentives” means tax credits authorized under the 3 program by the authority for an eligible business. 4 Sec. 3. NEW SECTION . 15.602 Eligible business. 5 1. To be eligible to receive tax incentives under 6 the program, a business must meet all of the following 7 requirements: 8 a. The community in which the proposed project is located 9 must approve the project either by ordinance or resolution. 10 b. The business must have a global presence, significant 11 market share, or national recognition in the industry in which 12 the business operates. 13 c. The business must be able to provide documentation that a 14 minimum of fifty-one percent of the business’s gross revenue is 15 generated from business conducted outside the state. 16 d. The business must be able to provide documentation that 17 a state other than Iowa is meaningfully competing for the 18 location, expansion, or retention of the business’s corporate 19 headquarters. 20 e. (1) The business must be primarily engaged in advanced 21 manufacturing, bioscience, insurance and finance, technology 22 and innovation, or research and development. The business 23 shall not be a data center business, a retail business, or 24 a business where a cover charge or membership requirement 25 restricts certain individuals from entering the business. 26 (2) Factors the authority shall consider to determine if 27 a business is primarily engaged in advanced manufacturing, 28 bioscience, insurance and finance, technology and innovation, 29 or research and development shall include but are not limited 30 to all of the following: 31 (a) The business’s North American industry classification 32 system code. 33 (b) The business’s main sources of revenue. 34 (c) The business’s customer base. 35 -3- LSB 5472SV (2) 91 nls/ko 3/ 19

S.F. 2301 f. (1) The business must not be solely relocating 1 operations from one area of the state to another area of 2 the state. A proposed project that does not create jobs or 3 involve a substantial amount of new capital investment shall 4 be presumed to be a relocation of operations. For purposes of 5 this subparagraph, the authority shall consider a letter from 6 the affected local community’s government officials supporting 7 the business’s move away from the affected local community 8 in making a determination whether the business is solely 9 relocating operations. 10 (2) This paragraph shall not be construed to prohibit 11 a business from expanding the business’s operations in a 12 community if the business has similar operations in this state 13 that are not closing or undergoing a substantial reduction in 14 operations. 15 g. The business must offer comprehensive benefits to 16 each full-time equivalent employee employed at its corporate 17 headquarters. The authority may adopt rules under chapter 17A 18 to determine the requirements for comprehensive benefits. 19 h. (1) The business must not have a record of violations 20 of law or of rules, including but not limited to antitrust, 21 environmental, trade, or worker safety, that over a period of 22 time show a consistent pattern or that establish the business’s 23 intentional, criminal, or reckless conduct in violation of such 24 laws or rules. 25 (2) In making determinations and findings under 26 subparagraph (1), and making a determination whether a business 27 is disqualified from the program, the authority shall be exempt 28 from chapter 17A. 29 2. In determining if a business is eligible to participate 30 in the program, the authority shall consider a variety of 31 factors including but not limited to all of the following: 32 a. The cost to the state of providing tax incentives 33 compared to the potential increase in state and local tax 34 collections from the project, the potential for population 35 -4- LSB 5472SV (2) 91 nls/ko 4/ 19

S.F. 2301 growth resulting from the project, and the potential for wage 1 growth resulting from the project. 2 b. The impact of the business’s proposed project on 3 businesses that are in competition with the business. 4 The authority shall make a good-faith effort to identify 5 existing Iowa businesses in competition with the business 6 being considered for the program. The authority shall make 7 a good-faith effort to determine the probability that any 8 proposed tax incentives will displace employees of a competing 9 business. In determining the impact on a competing business, 10 employee displacement from the competing business shall not be 11 considered created jobs for the applying business’s project. 12 c. The business’s proposed project’s economic impact on 13 the state. The authority shall place greater emphasis on 14 businesses and proposed projects that meet the following 15 requirements: 16 (1) The business has a high proportion of in-state 17 suppliers. 18 (2) The proposed project will diversify the state economy. 19 (3) The business has few in-state competitors. 20 (4) The proposed project has the potential to create jobs on 21 an ongoing basis, or will result in increased skills and wages 22 for employees of the eligible business. 23 (5) The proposed project has the potential to increase the 24 state’s overall gross domestic product. 25 (6) The proposed project will result in a newly constructed 26 facility, or a facility with a significantly increased taxable 27 valuation. 28 (7) Any other factors the authority deems relevant in 29 determining the economic impact of a proposed project. 30 Sec. 4. NEW SECTION . 15.603 Applications —— authorization 31 of tax incentives. 32 1. Applications for the program shall be submitted to the 33 authority in the form and manner prescribed by the authority by 34 rule. Each application must be accompanied by an application 35 -5- LSB 5472SV (2) 91 nls/ko 5/ 19

S.F. 2301 fee in an amount determined by the authority by rule. 1 2. In determining the eligibility of a business to 2 participate in the program the authority may engage outside 3 experts to complete a technical, financial, or other review 4 of an application submitted by a business if such review is 5 outside the expertise of the authority. 6 3. The authority and the board may negotiate with an 7 eligible business regarding the terms of, and the aggregate 8 value of, the tax incentives the eligible business may receive 9 under the program. 10 Sec. 5. NEW SECTION . 15.604 Agreement. 11 1. An eligible business that is approved by the authority to 12 participate in the program shall enter into an agreement with 13 the authority that specifies the criteria for the successful 14 completion of all requirements of the program. The agreement 15 must contain, at a minimum, provisions related to all of the 16 following: 17 a. The eligible business must certify to the authority 18 annually that the business is in compliance with the agreement. 19 b. If the eligible business fails to comply with any 20 requirements of the program or the agreement, the eligible 21 business may be required to repay any tax incentives the 22 authority issued to the eligible business. After a final 23 determination by the authority, the authority will notify 24 the department of revenue of any required repayment of a 25 tax incentive, which shall be considered a tax payment due 26 and payable to the department of revenue by any taxpayer 27 that claimed the tax incentive, and the failure to make the 28 repayment may be treated by the department of revenue in the 29 same manner as a failure to pay the tax shown due, or required 30 to be shown due, with the filing of a return or deposit form. 31 c. If the eligible business undergoes a layoff or 32 permanently closes any of its facilities within the state, the 33 eligible business may be subject to all of the following: 34 (1) A reduction or elimination of some or all of the tax 35 -6- LSB 5472SV (2) 91 nls/ko 6/ 19

S.F. 2301 incentives the authority issued to the eligible business. 1 (2) Repayment of any tax incentives that the business 2 has claimed, and payment of any penalties assessed by the 3 department of revenue. 4 d. The end date of the agreement. 5 e. The number of new corporate jobs and retained corporate 6 jobs to be created or retained as part of the project, the 7 qualifying wage threshold applicable to the project, and the 8 date on which the authority will initially verify the eligible 9 business employs the required number of new corporate jobs and 10 retained corporate jobs. 11 f. The maximum aggregate value of the tax incentives 12 authorized by the board. 13 g. The eligible business shall only employ individuals 14 legally authorized to work in this state. If the eligible 15 business is found to knowingly employ individuals who are 16 not legally authorized to work in this state, in addition to 17 any penalties provided by law, the eligible business may be 18 required to repay all or a portion of any tax incentives the 19 authority issued to the eligible business. 20 h. A requirement that the eligible business must continue to 21 own and operate a corporate headquarters in the state until the 22 end date of the agreement as specified in paragraph “d” . 23 i. Any terms deemed necessary by the authority to effect the 24 eligible business’s ongoing compliance with section 15.602. 25 2. The board shall not amend the terms of the agreement 26 to allow an increase in the maximum aggregate value of tax 27 incentives authorized by the board under section 15.603. 28 3. The eligible business shall comply with all applicable 29 terms of the agreement until the agreement end date. An 30 eligible business shall maintain the business’s base employment 31 level until the agreement end date. 32 4. The eligible business shall not assign the agreement 33 to another entity without the advance written approval of the 34 board. 35 -7- LSB 5472SV (2) 91 nls/ko 7/ 19

S.F. 2301 5. The authority may enforce the terms of the agreement as 1 necessary and appropriate. 2 Sec. 6. NEW SECTION . 15.605 Qualifying wage tax credit. 3 1. If the authority has entered into an agreement with an 4 eligible business pursuant to section 15.604, the authority 5 may authorize a qualifying wage tax credit with the eligible 6 business for a period not to exceed three years according 7 to the start and end date specified in the agreement. The 8 authority may issue a qualifying wage tax credit to the 9 eligible business for each year of the authorized period upon 10 verification under section 15.604, subsection 1, paragraph 11 “e” , that the eligible business employed the required number 12 of employees in new corporate jobs and retained corporate jobs 13 that pay at least two hundred percent of the qualifying wage 14 threshold. The tax credit for each year of the authorized 15 period shall equal no more than the sum of all of the 16 following: 17 a. Up to fifteen percent of the gross annual wages of new 18 corporate jobs that pay at least two hundred percent of the 19 qualifying wage threshold. 20 b. Up to one percent of the gross annual wages of retained 21 corporate jobs that pay at least two hundred percent of the 22 qualifying wage threshold, not to exceed one million dollars. 23 2. A tax credit shall be allowed against the taxes imposed 24 in chapter 422, subchapters II, III, and V, and against the 25 moneys and credits tax imposed in section 533.329. 26 3. In order for a taxpayer to claim a tax credit under 27 subsection 1, a tax credit certificate issued by the authority 28 shall be included with the taxpayer’s tax return. The tax 29 credit certificate shall contain the taxpayer’s name, address, 30 tax identification number, the amount of the credit, and other 31 information required by the authority. 32 4. An individual may claim a tax credit under subsection 33 1 on behalf of a partnership, limited liability company, 34 S corporation, estate, or trust electing to have income 35 -8- LSB 5472SV (2) 91 nls/ko 8/ 19

S.F. 2301 taxed directly to the individual. The amount claimed by the 1 individual shall be based upon the pro rata share of the 2 individual’s earnings from the partnership, limited liability 3 company, S corporation, estate, or trust. 4 5. Any tax credit in excess of the taxpayer’s liability 5 for the tax year is refundable. In lieu of claiming a refund, 6 an eligible business may elect to have the overpayment shown 7 on the eligible business’s final, completed return credited 8 to the eligible business’s tax liability for the immediately 9 succeeding tax year. A tax credit shall not be carried back 10 to a tax year prior to the tax year in which the tax credit is 11 first claimed by the eligible business. 12 6. Tax credit certificates issued pursuant to this section 13 are not transferable. 14 Sec. 7. NEW SECTION . 15.606 Other incentives. 15 The authority, in its discretion, may prohibit an eligible 16 business that has been issued tax incentives under the program 17 from receiving any additional tax incentive, tax credit, 18 grant, loan, or other financial assistance under any program 19 administered by the authority. 20 Sec. 8. NEW SECTION . 422.12R Qualifying wage tax credit. 21 The taxes imposed under this subchapter, less the credits 22 allowed under section 422.12, shall be reduced by a qualifying 23 wage tax credit allowed under section 15.605. 24 Sec. 9. Section 422.33, Code 2026, is amended by adding the 25 following new subsection: 26 NEW SUBSECTION . 4. The taxes imposed under this subchapter 27 shall be reduced by a qualifying wage tax credit allowed under 28 section 15.605. 29 Sec. 10. Section 422.60, Code 2026, is amended by adding the 30 following new subsection: 31 NEW SUBSECTION . 2. The taxes imposed under this subchapter 32 shall be reduced by a qualifying wage tax credit allowed under 33 section 15.605. 34 Sec. 11. Section 533.329, subsection 2, Code 2026, is 35 -9- LSB 5472SV (2) 91 nls/ko 9/ 19

S.F. 2301 amended by adding the following new paragraph: 1 NEW PARAGRAPH . m. The moneys and credits tax imposed under 2 this section shall be reduced by a qualifying wage tax credit 3 allowed under section 15.605. 4 Sec. 12. CODE EDITOR DIRECTIVE. The Code editor is directed 5 to designate sections 15.600 through 15.606, as enacted in this 6 division of this Act, as part 37 of subchapter II. 7 DIVISION II 8 MAJOR ECONOMIC GROWTH ATTRACTION PROGRAM 9 Sec. 13. Section 15.491, subsection 12, Code 2026, is 10 amended to read as follows: 11 12. “Foreign adversary” means a the following: 12 a. A foreign government or foreign non-government person as 13 determined in 15 C.F.R. §7.4 , and that is listed in 15 C.F.R. 14 §7.4(a) at any time from March 4, 2024, through the termination 15 of the program July 17, 2024 . 16 b. A foreign government or foreign non-government person as 17 determined in 15 C.F.R. §791.4, and that is listed in 15 C.F.R. 18 §791.4 at any time from July 18, 2024, through the termination 19 of the program. 20 Sec. 14. Section 15.501, Code 2026, is amended to read as 21 follows: 22 15.501 Restrictions on board. 23 The board shall not authorize tax incentives available under 24 the program, or an exemption to restrictions on agricultural 25 land holdings pursuant to this part , for more than two eligible 26 businesses, or on or after January 1, 2027 2030 , whichever 27 occurs first. 28 DIVISION III 29 BUSINESS INCENTIVES FOR GROWTH PROGRAM TRAINING FUND 30 Sec. 15. NEW SECTION . 15.512 Training fund. 31 1. A business incentives for growth program training fund 32 is created in the state treasury under the control of the 33 authority. An amount up to one and one-half percent of the 34 gross wages an eligible business pays according to an agreement 35 -10- LSB 5472SV (2) 91 nls/ko 10/ 19

S.F. 2301 entered into pursuant to section 15.506 shall be credited to 1 the fund from the withholding payments made by an eligible 2 business pursuant to section 422.16. Such jobs shall be 3 identified by the authority as having a sufficient economic 4 impact to warrant assistance with training. 5 2. On a quarterly basis, an eligible business shall disclose 6 the amount of gross wages that qualify under subsection 1 to 7 the authority and to the department of revenue. Based upon 8 the gross wage amount provided to the authority, the authority 9 shall calculate the amount of gross wages to be deposited into 10 the fund for the quarter, and the department of revenue shall 11 deposit that amount into the fund. 12 3. Moneys in the fund shall be used to reimburse training 13 expenses incurred by an eligible business that are associated 14 with the eligible business’s project. 15 4. An eligible business’s training expenses that may be 16 eligible for reimbursement must meet all of the following 17 criteria: 18 a. The expenses are paid to a third party. 19 b. The expenses are for training that is specific to the 20 project of the eligible business and necessary for the success 21 of the project. 22 c. The expenses were incurred over the period of time 23 identified in the agreement under section 15.506, but not to 24 exceed four years. 25 d. The expenses are documented to the satisfaction of the 26 authority. 27 5. An eligible business that has been approved by the 28 authority to receive a reimbursement from the fund shall not be 29 eligible to receive any other state incentive to be used for 30 the same purpose. 31 DIVISION IV 32 REPEAL OF THE NEW JOBS TAX CREDIT 33 Sec. 16. Section 2.48, subsection 3, paragraph e, 34 subparagraph (7), Code 2026, is amended by striking the 35 -11- LSB 5472SV (2) 91 nls/ko 11/ 19

S.F. 2301 subparagraph. 1 Sec. 17. REPEAL. Section 422.11A, Code 2026, is repealed. 2 Sec. 18. PRESERVATION OF EXISTING RIGHTS. This division of 3 this Act shall not limit, modify, or otherwise adversely affect 4 any amount of tax incentive issued, awarded, or allowed before 5 the effective date of this division of this Act, nor shall 6 it limit, modify, or otherwise adversely affect a taxpayer’s 7 right to claim or redeem a tax incentive issued, awarded, or 8 allowed before the effective date of this division of this Act, 9 including but not limited to any tax incentive carryforward 10 amount. 11 Sec. 19. EFFECTIVE DATE. This division of this Act, being 12 deemed of immediate importance, takes effect upon enactment. 13 DIVISION V 14 LOAD FORECASTING 15 Sec. 20. NEW SECTION . 15.120A Load forecasting report and 16 analysis of electric transmission system expansion plans. 17 To support economic development in the state, the authority 18 shall commission Iowa state university of science and 19 technology to produce a report forecasting the probable future 20 growth of the use of electricity within Iowa and within the 21 midwest region. The report shall include a load forecast and 22 an analysis of electric transmission system expansion plans. 23 The authority must commission such report from the university 24 at least every two years. In developing the report, the 25 university shall solicit the input of residential, commercial, 26 and industrial consumers and the electric industry. The load 27 forecast and state electric transmission system expansion 28 planning analysis must be published by December 31, 2028, and 29 biennially published on or before December 31 thereafter. The 30 authority may commission other reports as necessary to evaluate 31 energy needs including but not limited to natural gas. A 32 report commissioned pursuant to this section must be publicly 33 available on the authority’s internet site. 34 Sec. 21. Section 476.1A, subsection 2, Code 2026, is amended 35 -12- LSB 5472SV (2) 91 nls/ko 12/ 19

S.F. 2301 to read as follows: 1 2. However, sections section 476.2, subsection 7, section 2 476.20, subsections 1 through 4, sections 476.21 , 476.51 , 3 476.56 , 476.58 , 476.62 , and 476.66 , and chapters 476A and 478 , 4 to the extent applicable, apply to such electric utilities. 5 Sec. 22. Section 476.1B, subsection 2, Code 2026, is amended 6 to read as follows: 7 2. Section 476.20, subsections 1 through 4 , Section 476.2, 8 subsection 7, section 476.20, subsections 1 through 4, sections 9 476.51 , 476.56 , 476.58 , 476.62 , and 476.66 , and chapters 476A 10 and 478 , to the extent applicable, apply to such electric and 11 gas utilities. 12 Sec. 23. Section 476.2, Code 2026, is amended by adding the 13 following new subsection: 14 NEW SUBSECTION . 7. The commission shall have the authority 15 to compel all public utilities to share with Iowa state 16 university of science and technology information necessary to 17 develop state load forecasts and state electric transmission 18 system expansion planning analysis pursuant to section 15.120A. 19 The load forecast and state electric transmission system 20 expansion planning analysis published pursuant to section 21 15.120A may be used as evidentiary support in any proceedings 22 before the commission. 23 Sec. 24. NEW SECTION . 476.10C Load forecasts and analyses 24 of state electric transmission system expansion plans —— fund. 25 1. An electric transmission system expansion plans analysis 26 and load forecasting fund is created in the state treasury 27 under the control of the economic development authority. The 28 commission shall direct all electric utilities to remit to the 29 treasurer of state for deposit in the electric transmission 30 system expansion plans analysis and load forecasting fund a 31 percentage of the total gross operating revenues during the 32 last calendar year derived from the utilities’ intrastate 33 public utility operations. Moneys in the fund are appropriated 34 to the economic development authority to be used for the 35 -13- LSB 5472SV (2) 91 nls/ko 13/ 19

S.F. 2301 purposes of commissioning a report pursuant to section 15.120A. 1 Notwithstanding section 8.33, moneys in the fund that remain 2 unencumbered or unobligated at the close of a fiscal year shall 3 not revert but shall remain available for expenditure for the 4 purposes designated. Notwithstanding section 12C.7, subsection 5 2, interest or earnings on moneys in the fund shall be credited 6 to the fund. 7 2. The commission shall, by rule, establish a maximum 8 amount of remittances in aggregate and provide a schedule 9 for remittances. The remittances collected pursuant to this 10 section shall be in addition to the assessments permitted 11 pursuant to section 476.10. The commission shall allow 12 inclusion of these remittances in the budgets approved by the 13 commission pursuant to section 476.6, subsection 15, paragraph 14 “c” . 15 DIVISION VI 16 IOWA INDUSTRIAL NEW JOBS TRAINING PROGRAM 17 Sec. 25. Section 260E.3, subsection 1, paragraph b, Code 18 2026, is amended to read as follows: 19 b. New For an agreement entered into on or before June 20 30, 2026, new jobs credit from withholding to be received or 21 derived from new employment resulting from the project. 22 Sec. 26. Section 260E.3, subsection 4, Code 2026, is amended 23 to read as follows: 24 4. An agreement shall include a provision which fixes the 25 minimum amount of incremental property taxes , new jobs credit 26 from withholding, or tuition and fee payments which shall be 27 paid for program costs. An agreement entered into on or before 28 June 30, 2026, may include a provision which fixes the minimum 29 amount of new jobs credit from withholding which shall be paid 30 for program costs. 31 Sec. 27. Section 260E.5, unnumbered paragraph 1, Code 2026, 32 is amended to read as follows: 33 If an For an agreement entered into on or before June 34 30, 2026, if the agreement provides that all or part of 35 -14- LSB 5472SV (2) 91 nls/ko 14/ 19

S.F. 2301 program costs are to be met by receipt of new jobs credit from 1 withholding, it shall be done as follows: 2 EXPLANATION 3 The inclusion of this explanation does not constitute agreement with 4 the explanation’s substance by the members of the general assembly. 5 This bill relates to economic development authority programs 6 and tax credits; load forecasting and the state electric 7 transmission system expansion plans; and the industrial new 8 jobs training program. 9 DIVISION I —— HEADQUARTERS EXPANSION AND DEVELOPMENT FOR 10 GROWTH AND EMPLOYMENT PROGRAM. The bill creates a headquarters 11 expansion and development for growth and employment program 12 (EDGE program) to provide tax incentives to eligible 13 businesses. The qualifications for an eligible business, and 14 the factors the economic development authority (authority) 15 shall consider in determining if a business is eligible to 16 participate in the EDGE program are provided in the bill. 17 Applications for the EDGE program shall be submitted to the 18 authority. 19 The terms of, and aggregate value of, a tax incentive may 20 be negotiated between an eligible business, the authority, and 21 the board comprised of members of the authority appointed by 22 the governor (board). An eligible business that is approved to 23 participate in the EDGE program shall enter into an agreement 24 with the authority specifying the criteria for successful 25 completion of the program requirements. The requirements 26 for the program agreement are detailed in the bill, and the 27 authority may enforce such requirements. 28 If the authority enters into an agreement with an eligible 29 business, the authority may authorize a qualifying wage tax 30 credit for the eligible business for a period not to exceed 31 three years as specified in the agreement. The authority may 32 issue a qualifying wage tax credit to the eligible business for 33 each year of the authorized period upon verification that the 34 eligible business employed the required number of employees 35 -15- LSB 5472SV (2) 91 nls/ko 15/ 19

S.F. 2301 in new corporate jobs and retained corporate jobs that pay 1 at least 200 percent of the qualifying wage threshold. The 2 tax credit for each year of the authorized period shall equal 3 no more than the amount specified in the bill. A taxpayer 4 shall include a tax credit certificate issued by the authority 5 with the taxpayer’s tax return to claim the tax credit. An 6 individual may claim a tax credit on behalf of a partnership, 7 limited liability company, S corporation, estate, or trust 8 electing to have income taxed directly to the individual in 9 an amount based upon the pro rata share of the individual’s 10 earnings. Any tax credit in excess of the taxpayer’s liability 11 for the tax year is refundable or may be credited to the 12 immediately succeeding tax year. Tax credit certificates are 13 not transferable. 14 The authority may prohibit an eligible business that 15 receives a tax incentive from the program from receiving any 16 other tax incentives or financial assistance under any program 17 administered by the authority. 18 Under the bill, individual and corporate income taxes, 19 financial institution franchise taxes, and money and credits 20 taxes on credit unions shall be reduced by a qualifying wage 21 tax credit. 22 DIVISION II —— MAJOR ECONOMIC GROWTH ATTRACTION PROGRAM. 23 The bill amends the definition of a “foreign adversary” under 24 the major economic growth attraction program (MEGA program). 25 Under current law, a foreign adversary is a foreign government 26 or foreign nongovernment person as determined in 15 C.F.R. 27 §7.4, and as listed in 15 C.F.R. §7.4(a) at any time from March 28 4, 2024, through the termination of the program. Under the 29 bill, a foreign adversary is a foreign government or foreign 30 nongovernment person as determined in 15 C.F.R. §7.4, and as 31 listed in 15 C.F.R. §7.4(a) at any time from March 4, 2024, 32 through July 17, 2024, or, as determined in 15 C.F.R. §791.4, 33 and as listed in 15 C.F.R. §791.4 at any time from July 18, 34 2024, through the termination of the program. 35 -16- LSB 5472SV (2) 91 nls/ko 16/ 19

S.F. 2301 Under current law, the board shall not authorize tax 1 incentives available under the MEGA program, or an exemption to 2 restrictions on agricultural land holdings, for more than two 3 eligible businesses, or on or after January 1, 2027, whichever 4 occurs first. The bill extends this provision to January 1, 5 2030. 6 DIVISION III —— BUSINESS INCENTIVES FOR GROWTH PROGRAM 7 TRAINING FUND. The bill creates a business incentives for 8 growth program training fund (fund) in the state treasury under 9 the control of the authority. 10 Under the bill, an amount up to 1.5 percent of the gross 11 wages an eligible business pays pursuant to an agreement 12 with the authority shall be credited to the fund from the 13 withholding payments made by the eligible business. Such jobs 14 shall be identified by the authority as having a sufficient 15 economic impact to warrant assistance with training. On a 16 quarterly basis, an eligible business shall disclose the 17 amount of gross wages that qualify to the authority and to the 18 department of revenue (DOR). The authority shall calculate the 19 amount of gross wages to be deposited into the fund, and the 20 DOR shall deposit that amount into the fund. 21 Moneys in the fund shall be used to reimburse training 22 expenses incurred by an eligible business that are associated 23 with the eligible business’s project, and that meet the 24 requirements detailed in the bill. An eligible business that 25 has been approved to receive a reimbursement from the fund 26 shall not receive any other state incentives for the same 27 purpose. 28 DIVISION IV —— REPEAL OF THE NEW JOBS TAX CREDIT. The 29 bill repeals the new jobs tax credit under Code section 30 422.11A. The bill makes a conforming change to Code section 31 2.48(3)(e)(7). 32 This division of the bill, being deemed of immediate 33 importance, takes effect upon enactment. 34 DIVISION V —— LOAD FORECASTING. The bill relates to load 35 -17- LSB 5472SV (2) 91 nls/ko 17/ 19

S.F. 2301 forecasting and analysis of electric transmission system 1 expansion plans. The bill directs the authority to commission 2 Iowa state university of science and technology (ISU) to 3 produce a report forecasting the probable future growth of 4 electricity use within the state and within the midwest region. 5 The report must include a load forecast and an analysis of 6 electric transmission system expansion plans, and must be 7 commissioned from ISU at least once every two years. In 8 developing the report, ISU must solicit input from residential, 9 commercial, and industrial consumers and the electric industry. 10 The load forecast and electric transmission system expansion 11 planning analysis must be published by December 31, 2028, and 12 biennially published on or before December 31 thereafter. The 13 authority may commission other reports as necessary to evaluate 14 energy needs. A report shall be made publicly available on the 15 authority’s internet site. 16 The bill grants the Iowa utilities commission (commission) 17 authority to compel public utilities to share with ISU 18 information necessary to develop the load forecasts and 19 electric transmission system expansion planning analysis 20 required under the bill. The bill also provides that the load 21 forecast and electric transmission system expansion planning 22 analysis may be used as evidentiary support in any proceedings 23 before the commission. This authority to compel includes 24 all electric utilities, including electric public utilities 25 with few customers, electric cooperative corporations and 26 associations, and municipally owned utilities. 27 The bill requires the commission to direct all electric 28 utilities to remit to the treasurer of state for deposit in the 29 electric transmission system expansion planning analysis and 30 load forecasting fund, as created in the bill, a percentage of 31 the utilities’ total gross intrastate operating revenues from 32 the prior year. Moneys in the fund are appropriated to the 33 authority for the purpose of commissioning the load forecasting 34 report and analysis. The bill directs the commission to 35 -18- LSB 5472SV (2) 91 nls/ko 18/ 19

S.F. 2301 establish by rule an aggregate maximum amount of remittances 1 and a schedule for remittances. The remittances are in 2 addition to assessments otherwise permitted and may be included 3 in budgets approved for energy efficiency implementation. 4 DIVISION VI —— IOWA INDUSTRIAL NEW JOBS TRAINING PROGRAM. 5 Under current law, a community college may enter into an 6 agreement to establish a project which shall provide for 7 program costs, including deferred costs, which may be paid 8 from one or more sources, including the new jobs credit from 9 withholding to be received or derived from new employment 10 resulting from the project. The agreement shall include 11 a provision which fixes the minimum amount of incremental 12 property taxes, new jobs credit from withholding, or tuition 13 and fee payments which shall be paid for program costs. 14 Under the bill, the new jobs credit from withholding is only 15 available for agreements entered into on or before June 30, 16 2026, and such an agreement may include a provision which fixes 17 the minimum amount of new jobs credit from withholding which 18 shall be paid for program costs. 19 -19- LSB 5472SV (2) 91 nls/ko 19/ 19