Senate File 2506 - Introduced SENATE FILE 2506 BY COMMITTEE ON WAYS AND MEANS (SUCCESSOR TO SF 2301) (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; establishing 11 the new jobs training program interim study committee; the 12 research activities credit; and including effective date 13 provisions. 14 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 15 TLSB 5472SZ (3) 91 nls/ko

S.F. 2506 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 number of full-time 12 equivalent positions at a business, as established by the 13 authority and the business based on the business’s payroll 14 records, on the date the business applies for the program. 15 3. “Benefits” means nonwage compensation provided to an 16 employee. “Benefits” include medical and dental insurance, a 17 pension, a retirement plan, a profit-sharing plan, child care, 18 life insurance, vision insurance, and disability insurance. 19 4. “Community” means a city or county in the state. 20 5. “Corporate headquarters” means a location in the 21 state that serves as the principal executive office or 22 houses the core administrative operations for a business, 23 and that includes executive leadership offices, strategic 24 decision-making functions, and administrative and support staff 25 employees. 26 6. “Corporate job” means a position based at a corporate 27 headquarters that involves strategic planning, executive 28 decision-making, or core administrative functions. 29 7. “Created jobs” or “create jobs” means new, permanent, 30 full-time equivalent positions added to an eligible business’s 31 payroll, at the location of the eligible business’s project, in 32 excess of the eligible business’s base employment level. 33 8. “Data center business” means the same as defined in 34 section 423.3, subsection 95. 35 -1- LSB 5472SZ (3) 91 nls/ko 1/ 24

S.F. 2506 9. “Eligible business” means a business that meets the 1 requirements of section 15.602. 2 10. “Full-time equivalent position” means a non-part-time 3 position for the number of hours or days per week considered 4 to be full-time work for the kind of service or work performed 5 for an employer. Typically, a full-time equivalent position 6 requires two thousand eighty hours of work in a calendar year, 7 including all paid holidays, vacations, sick time, and other 8 paid leave. 9 11. “Gross annual wages” means all regular wages and 10 salaries received by an employee for performing services as 11 an employee of an employer. “Gross annual wages” does not 12 include nonregular forms of compensation, such as bonuses, 13 unusual overtime pay, commissions, stock options, pensions, 14 retirement or death benefits, unemployment benefits, life or 15 other insurance, or other fringe benefits. 16 12. “New corporate job” means a corporate job that is a 17 created job. 18 13. “Program” means the headquarters expansion and 19 development for growth and employment program. 20 14. “Project” means the retention or location of a corporate 21 headquarters for an eligible business, proposed in an eligible 22 business’s application to the program, that will accomplish the 23 goals of the program. 24 15. “Qualifying wage threshold” means the mean wage level 25 represented by the wages within two standard deviations of 26 the mean wage within the laborshed area in which the eligible 27 business is located, as calculated by the authority by rule, 28 using the most current covered wage and employment data 29 available from the department of workforce development for the 30 laborshed area in which the eligible business is located. 31 16. “Retained corporate job” means a corporate job that is 32 also a retained job. 33 17. “Retained jobs” means a full-time equivalent position 34 that is in existence at the time an eligible business applies 35 -2- LSB 5472SZ (3) 91 nls/ko 2/ 24

S.F. 2506 for the program that remains continuously filled, and that is 1 at risk of elimination if the proposed project for which the 2 eligible business is applying to the program does not proceed. 3 18. “Tax incentives” means tax credits authorized under the 4 program by the authority for an eligible business. 5 Sec. 3. NEW SECTION . 15.602 Eligible business. 6 1. To be eligible to receive tax incentives under 7 the program, a business must meet all of the following 8 requirements: 9 a. The community in which the proposed project is located 10 must approve the project either by ordinance or resolution. 11 b. The business must have a global presence, significant 12 market share, or national recognition in the industry in which 13 the business operates. 14 c. The business must be able to provide documentation that a 15 minimum of fifty-one percent of the business’s gross revenue is 16 generated from business conducted outside the state. 17 d. The business must be able to provide documentation that 18 a state other than Iowa is meaningfully competing for the 19 location or retention of the business’s corporate 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 5472SZ (3) 91 nls/ko 3/ 24

S.F. 2506 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 5472SZ (3) 91 nls/ko 4/ 24

S.F. 2506 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 5472SZ (3) 91 nls/ko 5/ 24

S.F. 2506 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 5472SZ (3) 91 nls/ko 6/ 24

S.F. 2506 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 5472SZ (3) 91 nls/ko 7/ 24

S.F. 2506 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 5472SZ (3) 91 nls/ko 8/ 24

S.F. 2506 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 5472SZ (3) 91 nls/ko 9/ 24

S.F. 2506 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 to employees specified in 35 -10- LSB 5472SZ (3) 91 nls/ko 10/ 24

S.F. 2506 an agreement entered into pursuant to section 15.506 shall be 1 credited to the fund from the withholding payments made by an 2 eligible business pursuant to section 422.16. Such jobs shall 3 be 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 5472SZ (3) 91 nls/ko 11/ 24

S.F. 2506 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 27 published report shall only rely on information provided by 28 utilities as required by section 476.2 in aggregate form and 29 exclude identifying information about an individual utility’s 30 electric system. The load forecast and state electric 31 transmission system expansion planning analysis must be 32 published by December 31, 2028, and biennially published on or 33 before December 31 thereafter. The authority may commission 34 other reports as necessary to evaluate energy needs including 35 -12- LSB 5472SZ (3) 91 nls/ko 12/ 24

S.F. 2506 but not limited to natural gas. A report commissioned pursuant 1 to this section must be publicly available on the authority’s 2 internet site. 3 Sec. 21. Section 476.1A, subsection 2, Code 2026, is amended 4 to read as follows: 5 2. However, sections section 476.2, subsection 7, section 6 476.20, subsections 1 through 4, sections 476.21 , 476.51 , 7 476.56 , 476.58 , 476.62 , and 476.66 , and chapters 476A and 478 , 8 to the extent applicable, apply to such electric utilities. 9 Sec. 22. Section 476.1B, subsection 2, Code 2026, is amended 10 to read as follows: 11 2. Section 476.20, subsections 1 through 4 , Section 476.2, 12 subsection 7, section 476.20, subsections 1 through 4, sections 13 476.51 , 476.56 , 476.58 , 476.62 , and 476.66 , and chapters 476A 14 and 478 , to the extent applicable, apply to such electric and 15 gas utilities. 16 Sec. 23. Section 476.2, Code 2026, is amended by adding the 17 following new subsection: 18 NEW SUBSECTION . 7. The commission shall have the authority 19 to compel all public utilities to share with Iowa state 20 university of science and technology the utility’s information 21 necessary to develop state load forecasts and state electric 22 transmission system expansion planning analysis pursuant to 23 section 15.120A. A public utility may use a third party 24 to prepare such information to be shared with Iowa state 25 university of science and technology. A public utility may 26 enter into a nondisclosure agreement with Iowa state university 27 of science and technology requiring the shared information be 28 kept confidential if the public utility reasonably believes 29 the information is a confidential record pursuant to section 30 22.7. The state load forecast and state electric transmission 31 system expansion planning aggregate analysis published pursuant 32 to section 15.120A may be used as evidentiary support in any 33 proceedings before the commission, provided the confidentiality 34 of any information provided by a public utility is maintained. 35 -13- LSB 5472SZ (3) 91 nls/ko 13/ 24

S.F. 2506 Sec. 24. NEW SECTION . 476.10C Load forecasts and analyses 1 of state electric transmission system expansion plans —— fund. 2 1. An electric transmission system expansion plans analysis 3 and load forecasting fund is created in the state treasury 4 under the control of the economic development authority. The 5 commission shall direct all electric utilities to remit to the 6 treasurer of state for deposit in the electric transmission 7 system expansion plans analysis and load forecasting fund not 8 more than two one-hundredths of one percent of the total gross 9 operating revenues during the last calendar year derived from 10 the utilities’ intrastate public utility operations. Moneys in 11 the fund are appropriated to the economic development authority 12 to be used for the purposes of commissioning a report pursuant 13 to section 15.120A. Notwithstanding section 8.33, moneys in 14 the fund that remain unencumbered or unobligated at the close 15 of a fiscal year shall not revert but shall remain available 16 for expenditure for the purposes designated. Notwithstanding 17 section 12C.7, subsection 2, interest or earnings on moneys in 18 the fund shall be credited to the fund. 19 2. The commission shall, by rule, establish a maximum 20 amount of remittances in aggregate and provide a schedule 21 for remittances. The remittances collected pursuant to this 22 section shall be in addition to the assessments permitted 23 pursuant to section 476.10. The commission shall allow 24 inclusion of these remittances in the budgets approved by the 25 commission pursuant to section 476.6, subsection 15, paragraph 26 “c” , but such remittances shall not be included when computing 27 the projected cumulative average annual cost for an electric 28 utility’s energy efficiency plan and demand response plan under 29 section 476.6, subsection 15, paragraph “c” . 30 DIVISION VI 31 IOWA INDUSTRIAL NEW JOBS TRAINING PROGRAM 32 Sec. 25. Section 260E.3, subsection 1, unnumbered paragraph 33 1, Code 2026, is amended to read as follows: 34 A community college may enter into an agreement to establish 35 -14- LSB 5472SZ (3) 91 nls/ko 14/ 24

S.F. 2506 a project. If an agreement is entered into, the community 1 college and the employer shall notify the department of 2 workforce development and the department of revenue as soon 3 as possible. An agreement shall provide for program costs, 4 including deferred costs, which may be paid from one or a 5 combination of the following sources: 6 Sec. 26. Section 260E.3, subsection 2, Code 2026, is amended 7 to read as follows: 8 2. a. Payment For an agreement entered into on or 9 before June 30, 2026, payment of program costs shall not be 10 deferred for a period longer than ten years from the date of 11 commencement of the project , and the agreed upon period shall 12 not be extended . 13 b. For an agreement entered into on or after July 1, 2026, 14 payment of program costs shall not be deferred for a period 15 longer than five years from the date of commencement of the 16 project. 17 Sec. 27. Section 260E.3, Code 2026, is amended by adding the 18 following new subsection: 19 NEW SUBSECTION . 6. A project shall not be funded under this 20 chapter unless the department of workforce development approves 21 the agreement. No more than thirty calendar days after 22 receipt of notice of an agreement pursuant to subsection 1, the 23 department of workforce development shall either approve or 24 deny the agreement and notify the community college, business, 25 and department of revenue of such decision. 26 Sec. 28. Section 260E.7, Code 2026, is amended by adding the 27 following new subsection: 28 NEW SUBSECTION . 4. A community college that receives 29 a new jobs credit from withholding under section 260E.5 30 shall annually report a detailed accounting of the community 31 college’s bond interest to the department of workforce 32 development, the department of education, and the department 33 of revenue. 34 Sec. 29. NEW SECTION . 260E.8 Eligible program costs. 35 -15- LSB 5472SZ (3) 91 nls/ko 15/ 24

S.F. 2506 To be eligible to receive a new jobs credit from withholding, 1 a community college must document to the satisfaction of the 2 department that the community college’s program costs meet all 3 of the following criteria: 4 1. The program costs are incurred over the period of time 5 specified in the agreement under section 260E.3. 6 2. The program costs are not incurred to reimburse travel, 7 conferences, or legal fees. 8 3. Administrative expenses account for no more than fifteen 9 percent of the program costs. 10 DIVISION VII 11 IOWA INDUSTRIAL NEW JOBS TRAINING PROGRAM INTERIM STUDY 12 COMMITTEE 13 Sec. 30. IOWA INDUSTRIAL NEW JOBS TRAINING PROGRAM INTERIM 14 STUDY COMMITTEE. 15 1. The legislative council is requested to establish an 16 interim study committee to meet during the 2026 legislative 17 interim to review the new jobs training program and make 18 recommendations regarding the program. 19 2. The membership of the committee shall consist of, at a 20 minimum: 21 a. Three members of the senate, two republicans and one 22 democrat, appointed by the majority leader of the senate. 23 b. Three members of the house of representatives, two 24 republicans and one democrat, appointed by the speaker of the 25 house of representatives. 26 c. A representative of a community college located within 27 the state. 28 d. A representative of the Iowa economic development 29 authority. 30 e. A representative of the department of workforce 31 development. 32 f. Three business owners who have participated in the new 33 jobs training program. 34 g. One business owner who has not participated in the new 35 -16- LSB 5472SZ (3) 91 nls/ko 16/ 24

S.F. 2506 jobs training program. 1 3. The interim study committee shall do all of the 2 following: 3 a. Review the new jobs training program, including but not 4 limited to all of the following: 5 (1) The original objectives of the program, and an 6 evaluation of whether the objectives are aligned with the 7 current workforce needs in the state. 8 (2) The number of jobs created as a result of the program. 9 (3) Wage increases for participants in the program prior to 10 and after participating in the program. 11 (4) Employee retention rates for employers participating 12 in the program. 13 (5) The financial impact of the program, including an 14 evaluation of the cost-effectiveness of the program, a 15 comparison of state funding versus economic output and job 16 creation, and an assessment of the return on investment for the 17 state and businesses that participate in the program. 18 (6) The quality and relevance of the training programs that 19 are offered, including whether each training program meets 20 industry standards and needs, and whether participants in the 21 training gain necessary skills to succeed in each participant’s 22 job. 23 (7) The effectiveness of the program in targeting 24 industries with the highest demand for skilled labor. 25 (8) Sectors that may require more focus and support from the 26 program. 27 b. Gather qualitative data through surveys or interviews 28 with program participants, and identify the strengths 29 and weaknesses of the new jobs training program from the 30 perspective of the participants. 31 c. Review partnerships with community colleges and training 32 providers to evaluate whether the partnerships are effective in 33 delivering relevant training, and identify ways to strengthen 34 or expand partnerships. 35 -17- LSB 5472SZ (3) 91 nls/ko 17/ 24

S.F. 2506 d. Assess the effectiveness of the program’s compliance 1 monitoring and oversight of the use of program funds and 2 participants’ adherence to the program requirements. 3 4. Meetings of the interim study committee may be held 4 electronically or in person, provided that the final meeting of 5 the interim study committee is held in person. 6 5. The interim study committee shall submit a report 7 detailing the committee’s findings and recommendations to the 8 general assembly no later than December 15, 2026. 9 DIVISION VIII 10 RESEARCH ACTIVITIES CREDIT 11 Sec. 31. Section 422.10, subsection 1, paragraph a, 12 subparagraph (2), Code 2026, is amended to read as follows: 13 (2) (a) The business claims and is allowed a research 14 credit for such qualified research expenses under section 41 15 of the Internal Revenue Code for the same taxable year as it is 16 claiming the credit provided in this section . 17 (b) If the credit is based on conducting agriscience 18 research as defined in subparagraph (1), subparagraph division 19 (b), subparagraph subdivision (i), subparagraph part (B), 20 section 41(d)(4) of the Internal Revenue Code does not apply 21 and qualified research expenses under section 41(b) of the 22 Internal Revenue Code includes all qualified research expenses 23 incurred for qualified research regardless of whether conducted 24 after the beginning of commercial production of the business 25 component within the meaning of section 41(d)(4)(A) of the 26 Internal Revenue Code or such research otherwise meets another 27 excluded category in section 41(d)(4) of the Internal Revenue 28 Code. 29 EXPLANATION 30 The inclusion of this explanation does not constitute agreement with 31 the explanation’s substance by the members of the general assembly. 32 This bill relates to economic development authority programs 33 and tax credits; load forecasting and the state electric 34 transmission system expansion plans; and the industrial new 35 -18- LSB 5472SZ (3) 91 nls/ko 18/ 24

S.F. 2506 jobs training program. 1 DIVISION I —— HEADQUARTERS EXPANSION AND DEVELOPMENT FOR 2 GROWTH AND EMPLOYMENT PROGRAM. The bill creates a headquarters 3 expansion and development for growth and employment program 4 (EDGE program) to provide tax incentives to eligible 5 businesses. The qualifications for an eligible business, and 6 the factors the economic development authority (authority) 7 shall consider in determining if a business is eligible to 8 participate in the EDGE program are provided in the bill. 9 Applications for the EDGE program shall be submitted to the 10 authority. 11 The terms of, and aggregate value of, a tax incentive may 12 be negotiated between an eligible business, the authority, and 13 the board comprised of members of the authority appointed by 14 the governor (board). An eligible business that is approved to 15 participate in the EDGE program shall enter into an agreement 16 with the authority specifying the criteria for successful 17 completion of the program requirements. The requirements 18 for the program agreement are detailed in the bill, and the 19 authority may enforce such requirements. 20 If the authority enters into an agreement with an eligible 21 business, the authority may authorize a qualifying wage tax 22 credit for the eligible business for a period not to exceed 23 three years as specified in the agreement. The authority may 24 issue a qualifying wage tax credit to the eligible business for 25 each year of the authorized period upon verification that the 26 eligible business employed the required number of employees 27 in new corporate jobs and retained corporate jobs that pay 28 at least 200 percent of the qualifying wage threshold. The 29 tax credit for each year of the authorized period shall equal 30 no more than the amount specified in the bill. A taxpayer 31 shall include a tax credit certificate issued by the authority 32 with the taxpayer’s tax return to claim the tax credit. An 33 individual may claim a tax credit on behalf of a partnership, 34 limited liability company, S corporation, estate, or trust 35 -19- LSB 5472SZ (3) 91 nls/ko 19/ 24