Senate File 2498 - Introduced SENATE FILE 2498 BY COMMITTEE ON WAYS AND MEANS (SUCCESSOR TO SSB 3181) A BILL FOR An Act relating to nuclear electric generation facilities 1 by creating sales and use tax exemptions and refunds, 2 making appropriations to the state board of regents for 3 establishing and maintaining a nuclear energy workforce, and 4 providing penalties. 5 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 6 TLSB 6847SV (3) 91 jm/jh

S.F. 2498 Section 1. NEW SECTION . 262.101 Nuclear energy workforce 1 fund —— appropriation —— report. 2 1. A nuclear energy workforce fund is established in the 3 office of the treasurer of state under the control of the state 4 board of regents. The fund consists of the contributions 5 made to the fund pursuant to section 423.3, subsection 111, 6 and any other appropriations made to the fund. Moneys in the 7 fund shall be separate from the general fund of the state 8 and shall not be considered part of the general fund of the 9 state. Moneys in the fund shall be used only as specified 10 in this section and shall be appropriated only for the uses 11 specified. Moneys in the fund are not subject to section 8.33 12 and shall not be transferred, used, obligated, appropriated, 13 or otherwise encumbered, except as provided in this section. 14 Notwithstanding section 12C.7, subsection 2, interest or 15 earnings on moneys deposited in the fund shall be credited to 16 the fund. 17 2. Moneys in the fund are appropriated to the board for the 18 purpose of establishing and maintaining programs and equipment 19 at one or more institutions of higher education governed by the 20 board that support nuclear energy workforce programs. 21 3. Beginning January 15, 2028, and each January 15 22 thereafter, the board shall submit a report to the general 23 assembly regarding the progress and implementation of 24 the nuclear energy workforce programs established at the 25 institutions governed by the board. The reports shall include 26 but are not limited to the numbers of students and educators 27 participating in the programs and the allocation of funds 28 appropriated for the programs. 29 Sec. 2. Section 423.3, Code 2026, is amended by adding the 30 following new subsection: 31 NEW SUBSECTION . 111. a. (1) To the extent permissible in 32 the agreement under paragraph “d” , the sales price of tangible 33 personal property or specified digital products sold, or of 34 services furnished to a nuclear electric generation facility. 35 -1- LSB 6847SV (3) 91 jm/jh 1/ 8

S.F. 2498 (2) The tangible personal property, specified digital 1 products, and services furnished shall be directly and 2 primarily used before, during, or after the site preparation, 3 construction, reconstruction, replacement, alteration, repair, 4 safe storage, maintenance, or restarting after decommissioning 5 of the nuclear electric generation facility. 6 b. This exemption does not apply to motor vehicles subject 7 to registration under chapter 321. 8 c. This subsection shall not be construed to limit any other 9 exemptions applicable under this chapter. 10 d. (1) As a condition of receiving the exemption under 11 this subsection, and prior to being eligible to receive the 12 exemption, the nuclear electric generation facility shall 13 enter into an agreement with the state board of regents and 14 the economic development authority that provides a minimum 15 contribution for establishing and maintaining programs and 16 equipment at one or more institutions of higher education 17 governed by the board that support a nuclear energy workforce. 18 The agreement shall, at a minimum, require the nuclear electric 19 generation facility to annually contribute at least fifteen 20 percent of the aggregate value of the sales and use tax 21 exemption and refund disclosed in the annual report to the 22 department pursuant to paragraph “e” for the previous calendar 23 year. The contribution shall be made to the department and 24 deposited into the nuclear energy workforce fund created in 25 section 262.101. 26 (2) The agreement shall establish the date when eligibility 27 for the exemption begins including whether and to what extent 28 the exemption applies to any tangible personal property or 29 specified digital products sold or to services furnished prior 30 to the agreement date. 31 e. (1) The nuclear electric generation facility shall 32 register with the department. The registration must include 33 all of the following: 34 (a) An executed copy of the agreement in paragraph “d” . 35 -2- LSB 6847SV (3) 91 jm/jh 2/ 8

S.F. 2498 (b) Any information the department requires. 1 (2) To maintain its registration, the nuclear electric 2 generation facility shall file an annual report with the 3 department beginning January 31, 2027, and by each January 31 4 thereafter, that contains all of the following information: 5 (a) The aggregate sales price amount of exempt tangible 6 personal property or digital products sold and services 7 furnished from the previous calendar year under this 8 subsection, including tangible personal property, specified 9 digital products, and services that are also exempt under 10 another subsection of this section. 11 (b) The aggregate sales price amount of building materials, 12 supplies, equipment, and services subject to a refund claim the 13 department approved during the previous calendar year under 14 section 423.4, subsection 12. 15 (c) Evidence the nuclear electric generation facility made 16 the contribution required by the agreement in paragraph “d” . 17 (d) Any other information required by the department. 18 (3) The nuclear electric generation facility shall repay 19 the aggregate amount of the sales and use tax exemptions and 20 refunds claimed in the calendar year for which the nuclear 21 electric generation facility did not make the required 22 contribution. Any repayment shall be considered a tax payment 23 due and payable to the department by the nuclear electric 24 generation facility, and the failure to make the repayment may 25 be treated by the department in the same manner as a failure to 26 pay the tax shown due, or required to be shown due, with the 27 filing of a return or deposit form. 28 (4) A nuclear electric generation facility that is not 29 registered with the department is not eligible to receive an 30 exemption under this subsection or a refund under section 31 423.4, subsection 12. 32 f. The department may adopt rules pursuant to chapter 17A 33 to administer this subsection. 34 g. For purposes of this subsection, “nuclear electric 35 -3- LSB 6847SV (3) 91 jm/jh 3/ 8

S.F. 2498 generation facility” means a facility located in this state that 1 uses nuclear fission, fusion, or other nuclear processes to 2 generate electricity for sale or for use in the transmission 3 or distribution grid and is licensed by the federal nuclear 4 regulatory commission. A “nuclear electric generation facility” 5 includes facilities undergoing restart after a decommissioning 6 period and facilities in advanced stages of development or 7 obtaining federal licensing from the federal nuclear regulatory 8 commission. A “nuclear electric generation facility” includes 9 all of the following: 10 (1) Nuclear reactors, reactor fuel cores, reactor vessels, 11 steam generators, heat exchangers, turbine systems, control 12 rods, instrumentation, cooling systems, fuel handling and 13 storage systems, radiation shielding, radiation sources and 14 other primary nuclear generation components, and spent fuel 15 storage. 16 (2) Structures and buildings housing nuclear generation 17 systems, including containment buildings, auxiliary buildings, 18 cooling towers, water intake or discharge structures, and 19 on-site storage facilities directly related to nuclear 20 operations. 21 (3) Electrical generation and transformation equipment, 22 including turbines, generators, switchgear, transformers, 23 inverters, transmission structures, conductors, substations, 24 and associated power conditioning and control equipment. 25 (4) Equipment and systems used for safety, security, 26 radiation monitoring, emergency power, operator training, 27 maintenance training, safety-related equipment storage, and 28 warehousing. 29 (5) Environmental protection required for operation of the 30 facility. 31 (6) System materials, components, equipment, storage, 32 structures, and buildings associated with integrated systems 33 that enhance the flexibility of the system in delivering energy 34 to the electrical grid, including but not limited to the 35 -4- LSB 6847SV (3) 91 jm/jh 4/ 8

S.F. 2498 following: 1 (a) Systems that store and utilize thermal energy or 2 electrical energy from the nuclear electric generation facility 3 prior to delivering energy to the grid. 4 (b) Energy storage systems that utilize a transmission 5 system interconnection to the same physical substation as the 6 nuclear electric generation facility. 7 (7) Materials, supplies, and components permanently 8 incorporated into or consumed in the construction, repair, or 9 maintenance of a nuclear electric generation facility. 10 (8) Digital control systems, software, cybersecurity, 11 infrastructure, and physical security systems and equipment 12 used in the safe and compliant operation of the nuclear 13 electric generation facility. 14 (9) Equipment, materials, systems, and services required to 15 restart operations at a previously operational nuclear electric 16 generation facility that has ceased commercial operation, 17 including but not limited to refurbishment, modernization. 18 regulatory compliance upgrades, and relicensing activities. 19 Sec. 3. Section 423.4, Code 2026, is amended by adding the 20 following new subsection: 21 NEW SUBSECTION . 12. a. A nuclear electric generation 22 facility, as defined in section 423.3, subsection 111, may 23 apply to the department for the refund of sales or use tax upon 24 the sales price of all sales of building materials, supplies, 25 equipment, or from service furnished to a contractor, used in 26 the performance of a written contract with the nuclear electric 27 generation facility if all of the following apply: 28 (1) The building materials, supplies, equipment, or 29 services are completely consumed in the performance of a 30 construction project with the nuclear electric generation 31 facility. 32 (2) The property that is the subject of the construction 33 project becomes public property or the property of the nuclear 34 electric generation facility. 35 -5- LSB 6847SV (3) 91 jm/jh 5/ 8

S.F. 2498 b. A contractor shall state under oath, on forms provided 1 by the department, the amount of such sales and building 2 materials, supplies, or equipment, or services furnished and 3 used in the performance of such contract, and upon which sales 4 or use tax has been paid, and shall file such forms with the 5 nuclear electric generation facility which has made any written 6 contract for performance by the contractor. The forms shall be 7 filed by the contractor with the nuclear electric generation 8 facility before final settlement is made. 9 c. A nuclear electric generation facility shall, not more 10 than one year after the final settlement has been made, apply 11 to the department for any refund of the amount of the sales or 12 use tax which shall have been paid upon any building materials, 13 supplies, equipment, or services furnished, the application 14 to be made in the manner and upon forms to be provided by the 15 department, and the department shall forthwith audit the claim 16 and, if approved, issue a warrant to the nuclear electric 17 generation facility in the amount of the sales or use tax which 18 has been paid to the state of Iowa under the contract. The 19 nuclear electric generation facility shall be registered with 20 the department as required under section 423.3, subsection 111, 21 at the time the nuclear electric generation facility applies 22 for refund under this subsection. 23 d. Refunds authorized under this subsection shall accrue 24 interest in accordance with section 421.60, subsection 2, 25 paragraph “e” . 26 e. Any contractor who willfully makes a false report of 27 tax paid under the provisions of this subsection is guilty of 28 a simple misdemeanor and in addition shall be liable for the 29 payment of the tax and any applicable penalty and interest. 30 EXPLANATION 31 The inclusion of this explanation does not constitute agreement with 32 the explanation’s substance by the members of the general assembly. 33 This bill makes certain sales and use tax exemptions 34 relating to nuclear electric generation facilities contingent 35 -6- LSB 6847SV (3) 91 jm/jh 6/ 8

S.F. 2498 upon making contributions to institutions of higher education 1 (regents institution) governed by the state board of regents 2 (board). 3 NUCLEAR ELECTRIC GENERATION FACILITY —— EXEMPTION. To 4 the extent permissible under an agreement required by 5 the bill, tangible personal property or specified digital 6 products sold and services furnished are exempted from 7 the state sales and use tax (exemption) before, during, or 8 after the site preparation, construction, reconstruction, 9 replacement, alteration, repair, safe storage, maintenance, 10 or the restarting after decommissioning of a nuclear electric 11 generation facility. The tangible personal property, specified 12 digital products, and services exempted are required to be 13 directly and primarily used for these purposes. 14 The bill defines “nuclear electric generation facility” 15 (facility) to mean a facility located in this state that 16 uses nuclear fission, fusion, or other nuclear processes to 17 generate electricity for sale or for use in the transmission 18 or distribution grid and is licensed by the federal nuclear 19 regulatory commission. The definition of facility in the bill 20 is comprehensive and includes but is not limited to nuclear 21 reactors, storage facilities, equipment, electrical generation, 22 and other structures. 23 AGREEMENT BY FACILITY. As a condition of receiving the 24 exemption created in the bill, a facility is required to enter 25 into an agreement with the board and the economic development 26 authority (authority) that requires the facility to make a 27 minimum contribution for establishing and maintaining programs 28 and equipment at one or more regents institutions governed 29 by the board that support nuclear energy workforce programs. 30 The agreement shall, at a minimum, require the facility to 31 contribute at least 15 percent of the aggregate value of 32 the exemption received pursuant to the bill for the purpose 33 of establishing and maintaining programs and equipment at a 34 regents institution that supports nuclear energy workforce 35 -7- LSB 6847SV (3) 91 jm/jh 7/ 8

S.F. 2498 programs. 1 The agreement with the authority shall establish the date 2 the exemption begins, including whether and to what extent 3 the exemption applies to any tangible personal property or 4 specified digital products sold, or services furnished prior 5 to the agreement date. 6 Beginning January 15, 2028, and each January 15 thereafter, 7 the bill requires the board to submit a report to the general 8 assembly regarding the progress and implementation of the 9 nuclear energy workforce programs. 10 REPORTING BY FACILITY. The bill requires a facility to 11 register with the department. Beginning January 31, 2027, and 12 each January 31 thereafter, a facility receiving an exemption 13 is required to file an annual report with the department of 14 revenue (DOR). The annual report shall provide the aggregate 15 sales price amount of tangible personal property, specified 16 digital products, and services that received an exemption in 17 the previous calendar year. 18 The bill requires DOR to calculate the aggregate value of 19 the exemption based upon the aggregate sales price amounts 20 disclosed in the annual report, and provide the aggregate value 21 of the exemption to the authority, for purposes of calculating 22 the 15 percent contribution for establishing and maintaining 23 programs and equipment at a regents institution that supports 24 nuclear energy workforce programs. 25 SALES AND USE TAX REFUNDS. The bill permits a facility to 26 apply to DOR for the refund of sales or tax upon the sales 27 price of all sales of building materials, supplies, equipment, 28 or from services furnished to a contractor, used in the 29 performance of a written contract with the facility, if certain 30 circumstances apply. Any contractor who willfully makes a 31 false report of taxes paid for purposes of obtaining a sales or 32 use tax refund under the bill commits a simple misdemeanor. 33 -8- LSB 6847SV (3) 91 jm/jh 8/ 8