House File 620 - Reprinted HOUSE FILE 620 BY COMMITTEE ON WAYS AND MEANS (SUCCESSOR TO HF 584) (SUCCESSOR TO HSB 132) (As Amended and Passed by the House April 17, 2013 ) A BILL FOR An Act relating to the economic development financial 1 assistance duties and powers of the economic development 2 authority by authorizing and creating fees, affecting the 3 aggregate tax credit limit for certain economic development 4 programs and the tax credit for the endow Iowa tax credit, 5 authorizing the diversion of withholding tax payments for 6 certain programs, making an appropriation, and including 7 effective date and retroactive applicability provisions. 8 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 9 HF 620 (4) 85 mm/rj/md

H.F. 620 DIVISION I 1 COLLECTION OF FEES 2 Section 1. Section 15.106B, Code 2013, is amended by adding 3 the following new subsection: 4 NEW SUBSECTION . 5. a. The authority may charge fees to 5 businesses or individuals who receive financial assistance 6 under chapter 15 or 15E. The amount of such fees shall be 7 determined based on the costs of the authority associated with 8 its performance of contract administration and compliance 9 duties relating to economic development programs. 10 b. The authority may charge businesses and individuals a fee 11 for the use of the authority’s federal EB-5 immigrant investor 12 regional center. 13 c. Fees collected by the authority pursuant to this 14 subsection shall be deposited in a fund within the state 15 treasury created pursuant to section 15.106A, subsection 1, 16 paragraph “o” , and are appropriated to the authority for the 17 purposes set out in section 15.106A, subsection 1, paragraph 18 “o”. However, fees collected by the authority pursuant to 19 section 15.330, subsection 12, and section 15E.198, shall be 20 used exclusively for costs associated with the administration 21 of due diligence and compliance. 22 Sec. 2. Section 15.330, Code 2013, is amended by adding the 23 following new subsection: 24 NEW SUBSECTION . 12. a. The imposition of a one-time 25 compliance cost fee of five hundred dollars to be collected 26 by the authority prior to the issuance of a tax incentive 27 certificate or the disbursement of financial assistance. 28 b. The imposition of a compliance cost fee equal to one-half 29 of one percent of the value of tax incentives claimed pursuant 30 to an agreement that has an aggregate tax incentive value of 31 one hundred thousand dollars or greater. The authority shall 32 collect the fee from the business after the tax incentive is 33 claimed by the business from the department of revenue. 34 Sec. 3. NEW SECTION . 15E.198 Compliance cost fees. 35 -1- HF 620 (4) 85 mm/rj/md 1/ 6

H.F. 620 The compliance cost fees imposed in 15.330, subsection 12, 1 shall apply to all agreements entered into under this division 2 and shall be collected by the authority in the same manner and 3 to the same extent as described in that subsection. 4 Sec. 4. EFFECTIVE UPON ENACTMENT. This division of this 5 Act, being deemed of immediate importance, takes effect upon 6 enactment. 7 Sec. 5. APPLICABILITY. This division of this Act applies to 8 agreements entered into on or after the effective date of this 9 division of this Act. 10 DIVISION II 11 AGGREGATE TAX CREDIT LIMITATION 12 Sec. 6. Section 15.119, subsection 1, Code 2013, is amended 13 to read as follows: 14 1. a. Notwithstanding any provision to the contrary in 15 any of the programs listed in subsection 2 , the authority, 16 except as provided in paragraph “b” , shall not authorize for 17 any one fiscal year an amount of tax credits for the programs 18 specified in subsection 2 that is in excess of one hundred 19 twenty eighty-five million dollars. 20 b. (1) The authority may authorize an amount of tax credits 21 during a fiscal year that is in excess of the amount specified 22 in paragraph “a” , but the amount of such excess shall be counted 23 against the total amount of tax credits that may be authorized 24 for the next fiscal year. 25 (2) Any amount of tax credits authorized and awarded during 26 a fiscal year for a program specified in subsection 2 which are 27 irrevocably declined by the awarded business on or before June 28 30 of the next fiscal year may be reallocated, authorized, and 29 awarded during the fiscal year in which the declination occurs. 30 Tax credits authorized pursuant to this subparagraph shall not 31 be considered for purposes of subparagraph (1). 32 Sec. 7. Section 15.119, subsection 2, paragraphs d and e, 33 Code 2013, are amended to read as follows: 34 d. The tax credits for investments in qualifying businesses 35 -2- HF 620 (4) 85 mm/rj/md 2/ 6

H.F. 620 and community-based seed capital funds issued pursuant to 1 section 15E.43 . In allocating tax credits pursuant to this 2 subsection , the authority shall allocate two million dollars 3 for purposes of this paragraph , unless the authority determines 4 that the tax credits awarded will be less than that amount . 5 e. The tax credits for investments in an innovation fund 6 pursuant to section 15E.52 . In allocating tax credits pursuant 7 to this subsection , the authority shall allocate eight million 8 dollars for purposes of this paragraph , unless the authority 9 determines that the tax credits awarded will be less than that 10 amount . 11 Sec. 8. EFFECTIVE UPON ENACTMENT. This division of this 12 Act, being deemed of immediate importance, takes effect upon 13 enactment. 14 Sec. 9. RETROACTIVE APPLICABILITY. This division of this 15 Act applies retroactively to July 1, 2012. 16 DIVISION III 17 ENDOW IOWA TAX CREDIT LIMIT 18 Sec. 10. Section 15E.305, subsection 2, Code 2013, is 19 amended to read as follows: 20 2. The aggregate amount of tax credits authorized pursuant 21 to this section shall not exceed a total of three five million 22 five hundred thousand dollars plus such additional credit 23 amount as provided by this section annually. 24 a. The maximum amount of tax credits granted to a taxpayer 25 shall not exceed five percent of the aggregate amount of tax 26 credits authorized. 27 a. b. Ten percent of the aggregate amount of tax credits 28 authorized in a calendar year shall be reserved for those 29 endowment gifts in amounts of thirty thousand dollars or less. 30 If by September 1 of a calendar year the entire ten percent of 31 the reserved tax credits is not distributed, the remaining tax 32 credits shall be available to any other eligible applicants. 33 b. For purposes of this subsection , the additional credit 34 amount shall be an amount for each applicable calendar year 35 -3- HF 620 (4) 85 mm/rj/md 3/ 6

H.F. 620 determined by the department of revenue equal to the amount of 1 money credited as provided by section 99F.11, subsection 3 , 2 paragraph “d” , subparagraph (3), for the prior fiscal year. 3 Sec. 11. Section 99F.11, subsection 3, paragraph d, 4 subparagraph (3), Code 2013, is amended by striking the 5 subparagraph. 6 Sec. 12. EFFECTIVE UPON ENACTMENT. This division of this 7 Act, being deemed of immediate importance, takes effect upon 8 enactment. 9 Sec. 13. RETROACTIVE APPLICABILITY. This division of this 10 Act applies retroactively to January 1, 2012, for endow Iowa 11 tax credits authorized on or after that date and for endow Iowa 12 tax credit applications received on or after that date. 13 DIVISION IV 14 WITHHOLDING TAX DIVERSION 15 Sec. 14. NEW SECTION . 15.331 Withholding tax payment 16 diversion. 17 1. If the authority enters into an agreement pursuant to 18 this part, or pursuant to chapter 15E, division XVIII, for 19 any of the incentives or assistance provided under this part, 20 the authority and the eligible business may agree to credit 21 a portion of the withholding payments required under section 22 422.16 to the authority as provided in this section. 23 2. a. An eligible business entering into a withholding 24 agreement with the authority pursuant to this section shall 25 remit the total amount of withholding payments due pursuant to 26 section 422.16 to the department of revenue. 27 b. The department of revenue shall quarterly deposit in a 28 fund created pursuant to section 15.106A an amount equal to two 29 and one-half percent of the gross wages paid by the eligible 30 business to each employee holding a created or retained job 31 covered by an agreement entered into pursuant to this part or 32 chapter 15E, division XVIII. Moneys to be deposited pursuant 33 to this paragraph shall not be paid to the authority until 34 the correct amounts have been verified by the department of 35 -4- HF 620 (4) 85 mm/rj/md 4/ 6

H.F. 620 revenue. 1 3. Withholding payments shall be deposited pursuant to this 2 section by the department of revenue for each employee holding 3 a created or retained job for the duration of the agreement 4 between the eligible business and the authority. 5 4. The authority and the eligible business shall provide 6 to the department of revenue any information necessary to 7 correctly process the diversion of withholding tax payments 8 pursuant to this section. 9 5. An employee holding a created or retained job shall 10 receive full credit for the amount withheld as provided in 11 section 422.16. 12 6. If a portion of the employee’s gross wages are subject 13 to a withholding credit diversion under chapter 260E, chapter 14 260G, or section 403.19A, or a supplemental withholding 15 credit diversion under section 15E.197, then the withholding 16 payments shall be credited in the following order of priority, 17 regardless of when the agreement was entered into under this 18 section: 19 a. First, the withholding payments to be credited pursuant 20 to chapters 260E and 260G and section 15E.197. 21 b. Second, the withholding payments to be credited pursuant 22 to this section. 23 c. Third, the withholding payments to be credited pursuant 24 to section 403.19A. 25 7. The authority, in conjunction with the department of 26 revenue, shall adopt rules for the administration of this 27 section. 28 Sec. 15. EFFECTIVE UPON ENACTMENT. This division of this 29 Act, being deemed of immediate importance, takes effect upon 30 enactment. 31 Sec. 16. RETROACTIVE APPLICABILITY. This division of 32 this Act applies retroactively to July 1, 2012, for high 33 quality jobs program agreements and enterprise zone program 34 agreements entered into on or after that date, and for awards 35 -5- HF 620 (4) 85 mm/rj/md 5/ 6

H.F. 620 of incentives or assistance made under those programs on or 1 after that date. 2 DIVISION V 3 CITY DEVELOPMENT BOARD FEES 4 Sec. 17. Section 368.10, Code 2013, is amended to read as 5 follows: 6 368.10 Rules —— establishment of filing fees. 7 The board may establish rules for the performance of its 8 duties and the conduct of proceedings before it. The rules 9 may include establishing filing fees for applications and 10 petitions submitted to the board. The amounts collected 11 from the establishment of such fees are appropriated to the 12 board for the purpose of reimbursing the economic development 13 authority for the budgeted costs of covering the board’s 14 expenses as described in section 368.9, subsection 1. Any 15 amounts collected in a fiscal year by the board in excess of 16 such budgeted costs shall be deposited in the general fund of 17 the state. The board’s rules are subject to chapter 17A , as 18 applicable. 19 -6- HF 620 (4) 85 mm/rj/md 6/ 6