Senate File 657 - Reprinted SENATE FILE 657 BY COMMITTEE ON WAYS AND MEANS (SUCCESSOR TO SSB 1205) (As Amended and Passed by the Senate May 13, 2025 ) A BILL FOR An Act related to state taxation and finance and other related 1 matters, by creating, modifying, and eliminating tax credits 2 and tax incentive programs, providing for penalties, and 3 including effective date and retroactive applicability 4 provisions. 5 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 6 SF 657 (2) 91 nls/ko/mb

S.F. 657 DIVISION I 1 ECONOMIC DEVELOPMENT PROGRAMS —— TAX CREDIT LIMITS 2 Section 1. Section 15.119, Code 2025, is amended to read as 3 follows: 4 15.119 Aggregate tax credit limit for certain economic 5 business development programs. 6 1. a. Notwithstanding any provision to the contrary in any 7 of the business development programs listed in subsection 2 , 8 the authority, except as provided in paragraph “b” , shall not 9 authorize for any one fiscal year an amount of tax credits for 10 the programs specified in subsection 2 that is in excess of one 11 hundred seventy ten million dollars. 12 b. (1) The authority may authorize an amount of tax credits 13 during a fiscal year that is in excess of the amount specified 14 in paragraph “a” , but the amount of such excess shall not exceed 15 twenty percent of the amount specified in paragraph “a” , and 16 shall be counted against the total amount of tax credits that 17 may be authorized for the next fiscal year. 18 (2) Any amount of tax credits authorized and awarded during 19 a fiscal year for a program specified in subsection 2 which 20 are irrevocably declined by the awarded business or revoked 21 by the authority on or before June 30 of the next fiscal year 22 may be reallocated, authorized, and awarded during the fiscal 23 year in which the declination or revocation occurs. Tax 24 credits authorized pursuant to this subparagraph shall not be 25 considered for purposes of subparagraph (1). 26 2. The authority, with the approval of the board, shall 27 adopt by rule a procedure for allocating the aggregate tax 28 credit limit established in this section among the following 29 The aggregate tax credit limit specified in subsection 1 shall 30 be allocated to business development programs as follows : 31 a. (1) The high quality jobs program administered pursuant 32 to subchapter II, part 13 . 33 (2) In allocating tax credits pursuant to this subsection 34 for the fiscal year beginning July 1, 2022, and for each fiscal 35 -1- SF 657 (2) 91 nls/ko/mb 1/ 72

S.F. 657 year thereafter, the authority shall not allocate more than 1 sixty-eight million dollars for purposes of this paragraph. 2 (3) In allocating tax credits pursuant to this subsection , 3 the authority shall prioritize issuing additional research 4 activities tax credits pursuant to section 15.335 . 5 b. The enterprise zones program administered pursuant to 6 sections 15E.191 through 15E.197, Code 2014 . 7 c. The assistive device tax credit program administered 8 pursuant to section 422.33, subsection 9 . 9 d. The tax credits for investments in qualifying businesses 10 issued pursuant to section 15E.43 . In allocating tax credits 11 pursuant to this subsection , the authority shall allocate two 12 million dollars for purposes of this paragraph, unless the 13 authority determines that the tax credits awarded will be less 14 than that amount. 15 e. a. (1) The tax credits for investments in an innovation 16 fund pursuant to section 15E.52 chapter 15E, subchapter VI, 17 and the seed investor tax credit pursuant to chapter 15E, 18 subchapter IV . In allocating tax credits pursuant to this 19 subsection , the authority shall allocate eight ten million 20 dollars for purposes of this paragraph, unless the authority 21 determines that the tax credits awarded will be less than that 22 amount and the board shall determine the tax credit amount 23 allocated to each program under this paragraph each fiscal 24 year . 25 (2) For the fiscal year beginning July 1, 2025, the 26 allocation pursuant to this paragraph shall be reduced by any 27 tax credit authorized by the authority prior to July 1, 2026, 28 for an investment in a qualifying business pursuant to chapter 29 15E, subchapter V, Code 2025. This subparagraph is repealed 30 July 1, 2026. 31 f. The redevelopment tax credit program for brownfields 32 and grayfields administered pursuant to sections 15.293A and 33 15.293B . 34 g. The workforce housing tax incentives program administered 35 -2- SF 657 (2) 91 nls/ko/mb 2/ 72

S.F. 657 pursuant to subchapter II, part 17 . In allocating tax credits 1 pursuant to this subsection , the authority shall not allocate 2 more than thirty-five million dollars for purposes of this 3 paragraph. Of the moneys allocated under this paragraph, 4 seventeen million five hundred thousand dollars shall be 5 reserved for allocation to qualified housing projects in small 6 cities, as defined in section 15.352 , that are registered on 7 or after July 1, 2017. 8 h. The renewable chemical production tax credit program 9 administered pursuant to subchapter II, part 12 . In allocating 10 tax credits pursuant to this subsection for the fiscal year 11 beginning July 1, 2021, and for each fiscal year beginning 12 before July 1, 2037, the authority shall not allocate more than 13 five million dollars for purposes of this paragraph. This 14 paragraph is repealed July 1, 2039. 15 3. In allocating the amount of tax credits authorized 16 pursuant to subsection 1 among the programs specified in 17 subsection 2 , the authority shall not allocate more than 18 fifteen million dollars for purposes of subsection 2 , paragraph 19 “f” . 20 b. The renewable chemical production tax credit pursuant 21 to subchapter II, part 12, and the sustainable aviation fuel 22 production tax credit program pursuant to subchapter II, part 23 36. In allocating tax credits pursuant to this subsection, the 24 authority shall allocate ten million dollars for purposes of 25 this paragraph, and the board shall determine the tax credit 26 amount allocated to each program specified in this paragraph 27 for each fiscal year. 28 c. The research and development tax credit program pursuant 29 to subchapter II, part 35. In allocating tax credits pursuant 30 to this subsection, the authority shall allocate forty million 31 dollars for purposes of this paragraph. 32 d. The business incentives for growth program administered 33 pursuant to subchapter II, part 33. In allocating tax credits 34 pursuant to this subsection for the fiscal year beginning July 35 -3- SF 657 (2) 91 nls/ko/mb 3/ 72

S.F. 657 1, 2026, and for each fiscal year thereafter, the authority 1 shall not allocate more than fifty million dollars for purposes 2 of this paragraph. 3 e. (1) The high quality jobs program administered pursuant 4 to chapter 15, subchapter II, part 13, and the business 5 incentives for growth program administered pursuant to chapter 6 15, subchapter II, part 33. In allocating tax credits pursuant 7 to this subsection, the authority shall allocate fifty million 8 dollars in the aggregate for purposes of this paragraph, by 9 allocating tax credits to the high quality jobs program prior 10 to January 1, 2026, and by allocating the remaining tax credits 11 to the business incentives for growth program on or after 12 January 1, 2026. 13 (2) This paragraph is repealed July 1, 2026. 14 4. 3. The authority shall submit to the department of 15 revenue on or before August 15 of each year a report on the tax 16 credits allocated pursuant to this section and the tax credits 17 awarded under each of the programs described in subsection 2 . 18 DIVISION II 19 ECONOMIC DEVELOPMENT PROGRAMS —— TAX CREDIT LIMITS 20 CONFORMING CHANGES 21 Sec. 2. Section 15.293A, subsection 6, Code 2025, is amended 22 to read as follows: 23 6. The amount of tax credits that may be awarded by the 24 board shall be subject to the limitation in section 15.119 25 Except as provided in section 15.293B, subsection 6, the board 26 shall not award in any one fiscal year an amount of tax credits 27 that exceeds fifteen million dollars . 28 Sec. 3. Section 15.293B, subsection 6, Code 2025, is amended 29 to read as follows: 30 6. a. (1) Tax credits revoked under subsection 3 including 31 tax credits revoked up to five years prior to July 1, 2021, and 32 tax credits not awarded under subsection 4 or 5 , may be awarded 33 in the next annual application period established in subsection 34 1 , paragraph “c” . 35 -4- SF 657 (2) 91 nls/ko/mb 4/ 72

S.F. 657 (2) Any amount of tax credits authorized and awarded during 1 a fiscal year which are irrevocably declined by the awarded 2 investor on or before June 30 of the immediately succeeding 3 fiscal year may be awarded in the next annual application 4 period established in subsection 1, paragraph “c” . 5 b. Tax credits awarded pursuant to paragraph “a” shall not 6 be counted against the limit under section 15.119, subsection 3 7 15.293A, subsection 6 . 8 Sec. 4. Section 15.318, subsection 3, paragraph e, Code 9 2025, is amended to read as follows: 10 e. In each fiscal year beginning on or after July 1, 2023 11 2025 , and ending on or before June 30, 2036, the authority may 12 award an amount of tax credits under the program not to exceed 13 the maximum aggregate amount allocated in determined by the 14 board pursuant to section 15.119, subsection 2, paragraph “h” 15 “b” . 16 Sec. 5. Section 15.354, subsection 2, paragraph a, Code 17 2025, is amended to read as follows: 18 a. All completed applications shall be reviewed and 19 scored on a competitive basis by the authority pursuant to 20 rules adopted by the authority. In scoring applications, the 21 authority may award additional points for all of the following: 22 (1) A housing project located in a community where no 23 housing project has been awarded a tax incentive under the 24 program in the immediately preceding three application periods. 25 (2) A housing project located in a community where a recent 26 or planned business expansion, or a new business, has received 27 a tax incentive or financial assistance under the high quality 28 jobs program administered pursuant to subchapter II, part 13, 29 the major economic growth attraction program administered 30 pursuant to subchapter II, part 32, or the business incentives 31 for growth program administered pursuant to subchapter II, part 32 33. 33 Sec. 6. Section 15.354, subsection 4, Code 2025, is amended 34 by striking the subsection and inserting in lieu thereof the 35 -5- SF 657 (2) 91 nls/ko/mb 5/ 72

S.F. 657 following: 1 4. Maximum tax incentives amount. 2 a. (1) In the fiscal year beginning July 1, 2025, and 3 ending June 30, 2026, the authority shall not award an amount 4 of tax credits in excess of thirty-nine million five hundred 5 thousand dollars. 6 (2) In the fiscal year beginning July 1, 2026, and ending 7 June 30, 2027, the authority shall not award an amount of tax 8 credits in excess of thirty-six million five hundred thousand 9 dollars. 10 (3) In the fiscal year beginning July 1, 2027, and for each 11 fiscal year thereafter, the authority shall not award an amount 12 of tax credits in excess of thirty-five million dollars. 13 b. Of the tax credits allocated under paragraph “a” , fifty 14 percent of the allocation available in each fiscal year shall 15 be reserved for allocation to qualified housing projects in 16 small cities. 17 c. Notwithstanding paragraph “b” , if the sum of the amount 18 of tax incentives awarded in a given fiscal year for housing 19 projects located in small cities based on the authority’s 20 review and scoring of applications does not exceed the amount 21 reserved for housing projects located in small cities pursuant 22 to paragraph “b” , the authority may award the remaining amount 23 of tax incentives reserved for housing projects located in 24 small cities to other housing projects during that same fiscal 25 year. 26 d. Tax credits revoked by the authority or irrevocably 27 declined by a housing business before June 30 of the fiscal 28 year following the award may be awarded during the fiscal year 29 the revocation or declination occurs. Tax credits awarded 30 pursuant to this paragraph shall not be counted against the tax 31 credit limit established in paragraph “a” . 32 e. The maximum aggregate amount of tax incentives that 33 may be awarded and issued under section 15.355 to a housing 34 business for a housing project shall not exceed one million 35 -6- SF 657 (2) 91 nls/ko/mb 6/ 72

S.F. 657 dollars. 1 f. If a housing business qualifies for a higher amount 2 of tax incentives under section 15.355 than is allowed by 3 the limitation imposed in paragraph “e” , the authority and 4 the housing business may negotiate an apportionment of the 5 reduction in tax incentives between the sales tax refund 6 provided in section 15.355, subsection 2, and the workforce 7 housing investment tax credits provided in section 15.355, 8 subsection 3, provided the total aggregate amount of tax 9 incentives after the apportioned reduction does not exceed the 10 amount in paragraph “e” . 11 g. The authority shall issue tax incentives under the 12 program on a first-come, first-served basis until the maximum 13 amount of tax incentives allowed under paragraph “a” is reached. 14 Sec. 7. Section 15.354, subsection 6, paragraph d, Code 15 2025, is amended to read as follows: 16 d. The authority shall administer tax credit allocations 17 for disaster recovery housing projects separately from the 18 general allocation and separately from the allocation reserved 19 for small cities in section 15.119, subsection 2, paragraph 20 “g” . The authority shall issue tax incentives under the 21 program for disaster recovery housing projects on a first-come, 22 first-served basis until the maximum amount of tax incentives 23 allocated under section 15.119, subsection 5 , is reached. The 24 authority shall maintain a list of disaster recovery housing 25 projects awarded tax incentives under the program, so that if 26 the maximum aggregate amount of tax incentives allocated for 27 disaster recovery housing projects under the program is reached 28 in a given fiscal year, such disaster recovery housing projects 29 that were completed but for which tax incentives were not 30 issued shall be placed on a wait list in the order the disaster 31 recovery housing projects were awarded tax incentives pursuant 32 to paragraph “c” , and shall be given priority for receiving 33 tax incentives in succeeding fiscal years maximum tax credit 34 amounts specified in section 15.354, subsection 4, paragraphs 35 -7- SF 657 (2) 91 nls/ko/mb 7/ 72

S.F. 657 “a” and “b” . 1 DIVISION III 2 BUSINESS INCENTIVES FOR GROWTH PROGRAM 3 Sec. 8. NEW SECTION . 15.111 Assistance for certain programs 4 and projects. 5 1. a. Under the authority provided in section 15.106A, 6 there shall be established one or more funds within the state 7 treasury, under the control of the authority, to be used for 8 purposes of this section. 9 b. A fund established for purposes of this section shall 10 consist of any moneys appropriated to the authority for 11 purposes of this section, or moneys otherwise accruing to 12 the authority and deposited in the fund for purposes of this 13 section. 14 c. Interest or earnings on moneys in a fund used for the 15 purposes of this section, and all repayments or recaptures of 16 the assistance provided under this section, shall accrue to 17 the authority and shall be used for purposes of this section, 18 notwithstanding section 12C.7. Moneys in a fund are not 19 subject to section 8.33. 20 2. a. The moneys in a fund established for purposes of 21 this section, as described in subsection 1, shall be allocated 22 by the authority in appropriate amounts to be used for the 23 following purposes: 24 (1) For program support. For purposes of this subparagraph, 25 “program support” means the services necessary for the efficient 26 administration of a program administered by the authority, 27 including but not limited to administrative costs, conducting a 28 statewide laborshed study in coordination with the department 29 of workforce development, outreach to business and marketing 30 programs, the procurement of technical assistance, and the 31 implementation of information technology. 32 (2) For deposit in the innovation and commercialization 33 development fund created pursuant to section 15.412. 34 (3) For providing financial assistance to businesses 35 -8- SF 657 (2) 91 nls/ko/mb 8/ 72

S.F. 657 engaged in disaster recovery. For purposes of this 1 subparagraph, “business engaged in disaster recovery” means 2 a business located in an area declared a disaster area by a 3 federal official, that has sustained physical damage, has 4 closed as a result of a natural disaster, and has a plan for 5 reopening that includes employing a substantial number of the 6 employees the business employed before the natural disaster 7 occurred. 8 (4) For deposit in the entrepreneur investment awards 9 program fund pursuant to section 15E.363. 10 (5) For deposit in a fund created for purposes of the 11 strategic infrastructure program established pursuant to 12 section 15.313. 13 (6) For deposit in the nuisance property remediation fund 14 established pursuant to section 15.338. 15 (7) For deposit in the community catalyst building 16 remediation fund established pursuant to section 15.231. 17 (8) For providing financial assistance to eligible 18 businesses for the business incentives for growth program 19 pursuant to section 15.504. 20 b. Each fiscal year, the authority shall estimate the 21 amount of revenues available for purposes of this section and 22 shall develop a budget appropriate for the expenditure of the 23 revenues available. 24 Sec. 9. NEW SECTION . 15.502 Short title. 25 This part shall be known and may be cited as the “Business 26 Incentives for Growth Program” or “BIG Program” . 27 Sec. 10. NEW SECTION . 15.503 Definitions. 28 As used in this part, unless the context otherwise requires: 29 1. “Base employment level” means the number of full-time 30 equivalent positions at a business, as established by the 31 authority and the business using the business’s payroll 32 records, as of the date the business applies for tax incentives 33 under the program. 34 2. “Benefits” means nonwage compensation provided to an 35 -9- SF 657 (2) 91 nls/ko/mb 9/ 72

S.F. 657 employee. “Benefits” include medical and dental insurance, a 1 pension, a retirement plan, a profit-sharing plan, child care, 2 life insurance, vision insurance, and disability insurance. 3 3. “Community” means a city, county, or entity established 4 pursuant to chapter 28E. 5 4. “Contract completion” means the date of completion of 6 the terms of a contract between a contractor and an eligible 7 business. 8 5. “Contractor” means a person that has executed a contract 9 with an eligible business for the provision of property, 10 materials, or services for the construction or equipping of a 11 facility that is part of the eligible business’s project. 12 6. “Created jobs” or “create jobs” means new, permanent, 13 full-time equivalent positions added to an eligible business’s 14 payroll, at the location of the eligible business’s project, in 15 excess of the eligible business’s base employment level. 16 7. “Data center business” means the same as defined in 17 section 423.3, subsection 95. 18 8. “Eligible business” means a business that meets the 19 requirements of section 15.504. 20 9. “Full-time equivalent position” means a non-part-time 21 position for the number of hours or days per week considered 22 to be full-time work for the kind of service or work performed 23 for an employer. Typically, a full-time equivalent position 24 requires two thousand eighty hours of work in a calendar year, 25 including all paid holidays, vacations, sick time, and other 26 paid leave. 27 10. “Program” means the business incentives for growth 28 program. 29 11. “Project” means an activity or set of activities 30 directly related to the start-up, location, modernization, or 31 expansion of an eligible business and proposed in an eligible 32 business’s application to the program, that will accomplish the 33 goals of the program. 34 12. “Project completion date” means the date by which an 35 -10- SF 657 (2) 91 nls/ko/mb 10/ 72

S.F. 657 eligible business that has been approved by the authority to 1 participate in the program agrees to complete the terms and 2 conditions of the agreement under section 15.506. 3 13. “Project completion period” means the period of time 4 between the date the authority approves an eligible business to 5 participate in the program and the project completion date. 6 14. “Qualifying investment” means a capital investment 7 in real property, including the purchase price of the land 8 and existing buildings and structures, site preparation, 9 improvements to the real property, building construction, and 10 long-term lease costs. “Qualifying investment” also means 11 a capital investment in depreciable assets for use in the 12 operation of an eligible business. 13 15. “Qualifying wage threshold” means the mean wage level 14 represented by the wages within two standard deviations of 15 the mean wage within the laborshed area in which the eligible 16 business is located, as calculated by the authority by rule, 17 using the most current covered wage and employment data 18 available from the department of workforce development for the 19 laborshed area in which the eligible business is located. 20 16. “Retained job” means a full-time equivalent position 21 that is in existence at the time an eligible business applies 22 for the program that remains continuously filled, and that is 23 at risk of elimination if the proposed project for which the 24 eligible business is applying to the program does not proceed. 25 17. “Subcontractor” means a person that contracts with 26 a contractor for the provision of property, materials, or 27 services for the construction or equipping of a facility that 28 is part of an eligible business’s project. 29 18. “Tax incentives” means tax credits, tax refunds, or tax 30 exemptions authorized under the program by the authority for an 31 eligible business. 32 Sec. 11. NEW SECTION . 15.504 Eligible business. 33 1. To be eligible to receive tax incentives under 34 the program, a business must meet all of the following 35 -11- SF 657 (2) 91 nls/ko/mb 11/ 72

S.F. 657 requirements: 1 a. The community in which the proposed project is located 2 must approve the project either by ordinance or resolution. 3 b. (1) The business must be primarily engaged in advanced 4 manufacturing, bioscience, insurance and finance, or technology 5 and innovation. The business shall not be a data center 6 business, a retail business, or a business where a cover charge 7 or membership requirement restricts certain individuals from 8 entering the business. 9 (2) Factors the authority shall consider to determine if 10 a business is primarily engaged in advanced manufacturing, 11 biosciences, insurance and finance, or technology and 12 innovation shall include but are not limited to all of the 13 following: 14 (a) The business’s North American industry classification 15 system code. 16 (b) The business’s main sources of revenue. 17 (c) The business’s customer base. 18 c. (1) The business must not be solely relocating 19 operations from one area of the state to another area of 20 the state. A proposed project that does not create jobs or 21 involve a substantial amount of new capital investment shall 22 be presumed to be a relocation of operations. For purposes of 23 this subparagraph, the authority shall consider a letter from 24 the affected local community’s government officials supporting 25 the business’s move away from the affected local community 26 in making a determination whether the business is solely 27 relocating operations. 28 (2) This paragraph shall not be construed to prohibit 29 a business from expanding the business’s operations in a 30 community if the business has similar operations in this state 31 that are not closing or undergoing a substantial reduction in 32 operations. 33 d. The business must offer comprehensive benefits to each 34 full-time equivalent employee employed at the project. The 35 -12- SF 657 (2) 91 nls/ko/mb 12/ 72

S.F. 657 authority may adopt rules under chapter 17A to determine the 1 procedure for establishing requirements for comprehensive 2 benefits. 3 e. (1) The business must not have a record of violations of 4 the law or of rules, including but not limited to antitrust, 5 environmental, trade, or worker safety, that over a period of 6 time show a consistent pattern or that establish the business’s 7 intentional, criminal, or reckless conduct in violation of such 8 laws or rules. 9 (2) If the authority determines that the business has a 10 record of violations described in subparagraph (1), and the 11 authority finds that the violations did not seriously affect 12 public health, public safety, or the environment, the business 13 may be eligible to qualify for the program. 14 (3) If the authority determines that the business has 15 a record of violations described in subparagraph (1), and 16 the authority finds that there were mitigating circumstances 17 related to the violations, the business may be eligible to 18 qualify for the program. 19 (4) In making determinations and findings under 20 subparagraphs (2) and (3), and making a determination whether a 21 business is disqualified from the program, the authority shall 22 be exempt from chapter 17A. 23 2. In determining if a business is eligible to participate 24 in the program, the authority shall consider a variety of 25 factors, including but not limited to all of the following: 26 a. The impact of the business’s proposed project on 27 businesses that are in competition with the business. 28 The authority shall make a good-faith effort to identify 29 existing Iowa businesses in competition with the business 30 being considered for the program. The authority shall make 31 a good-faith effort to determine the probability that any 32 proposed tax incentives will displace employees of the 33 competing businesses. 34 b. The business’s proposed project’s economic impact on 35 -13- SF 657 (2) 91 nls/ko/mb 13/ 72

S.F. 657 the state. The authority shall place greater emphasis on 1 businesses and proposed projects that meet the following 2 requirements: 3 (1) The business has a high proportion of in-state 4 suppliers. 5 (2) The proposed project will diversify the state economy. 6 (3) The business has few in-state competitors. 7 (4) The proposed project has the potential to create jobs on 8 an ongoing basis, or will result in increased skills and wages 9 for employees of the eligible business. 10 (5) The proposed project has the potential to increase 11 productivity, efficiency, and competitiveness through adoption 12 and integration of smart technologies including specialized 13 hardware, software, or other equipment. 14 (6) The proposed project has the potential to increase the 15 state’s overall gross domestic product. 16 (7) Any other factors the authority deems relevant in 17 determining the economic impact of a proposed project. 18 Sec. 12. NEW SECTION . 15.505 Applications —— authorization 19 of tax credits and exemptions. 20 1. a. Applications for the program shall be submitted 21 to the authority in the form and manner prescribed by the 22 authority by rule. Each application must be accompanied by an 23 application fee in an amount determined by the authority by 24 rule. 25 b. For a proposed project that will result in elevated 26 water consumption by the business, the application shall be 27 accompanied by a water conservation and waste reduction plan, 28 and shall be submitted to the authority in the form and manner 29 prescribed by the authority by rule. 30 2. In determining the eligibility of a business to 31 participate in the program, the authority may engage outside 32 experts to complete a technical, financial, or other review of 33 an application submitted by a business. 34 3. a. The authority and the board may negotiate with an 35 -14- SF 657 (2) 91 nls/ko/mb 14/ 72

S.F. 657 eligible business regarding the terms of, and the aggregate 1 value of, the tax incentives the eligible business may receive 2 under the program. The maximum aggregate value of the tax 3 incentives that any one eligible business may receive shall 4 not exceed five percent of the eligible business’s qualifying 5 investment, unless the eligible business’s project is located 6 in a rural county, in which case the maximum aggregate value 7 of tax incentives that any one eligible business may receive 8 shall not exceed seven and one-half percent of the eligible 9 business’s qualifying investment. For purposes of this 10 paragraph, “rural county” means a county in the state with a 11 population of twenty thousand or less based on the most recent 12 decennial census released by the United States census bureau. 13 b. The board may authorize any combination of tax incentives 14 available under the program for an eligible business. 15 4. The board shall not authorize an award under this part 16 before January 1, 2026. 17 Sec. 13. NEW SECTION . 15.506 Agreement. 18 1. An eligible business that is approved by the authority to 19 participate in the program shall enter into an agreement with 20 the authority that specifies the criteria for the successful 21 completion of all requirements of the program. The agreement 22 must contain, at a minimum, provisions related to all of the 23 following: 24 a. The eligible business must certify to the authority 25 annually that the business is in compliance with the agreement. 26 b. If the eligible business fails to comply with any 27 requirements of the program or the agreement, as determined 28 by the authority, the eligible business may be required to 29 repay any tax incentives the authority issued to the eligible 30 business. After a final determination by the authority, the 31 authority will notify the department of revenue of any required 32 repayment of a tax incentive, which shall be considered a 33 tax payment due and payable to the department of revenue by 34 any taxpayer that claimed the tax incentive, and the failure 35 -15- SF 657 (2) 91 nls/ko/mb 15/ 72

S.F. 657 to make the repayment may be treated by the department of 1 revenue in the same manner as a failure to pay the tax shown 2 due, or required to be shown due, with the filing of a return 3 or deposit form. A county shall have the authority to take 4 action to recover the value of property taxes not collected as 5 a result of the exemption provided to the business under this 6 part. 7 c. If the eligible business undergoes a layoff or 8 permanently closes any of its facilities within the state, the 9 eligible business may be subject to all of the following: 10 (1) A reduction or elimination of some or all of the tax 11 incentives the authority issued to the eligible business. 12 (2) Repayment of any tax incentives that the business 13 has claimed, and payment of any penalties assessed by the 14 department of revenue. 15 d. The project completion date, the agreement end date, 16 the base employment level, any retained jobs, the number of 17 created jobs, the qualifying wage threshold that is applicable 18 to the project, the amount of qualifying investment, the 19 maximum aggregate value of the tax incentives authorized by the 20 board, and any other terms and obligations the authority deems 21 necessary or material to the determination of the business’s 22 eligibility for the program, or the aggregate value of tax 23 incentives approved by the board. 24 e. The eligible business shall only employ individuals 25 legally authorized to work in this state. If the eligible 26 business is found to knowingly employ individuals who are 27 not legally authorized to work in this state, in addition 28 to any penalties provided by law, all or a portion of any 29 tax incentives issued by the authority shall be subject 30 to repayment as described in section 15.506, subsection 1, 31 paragraph “b” . 32 f. Any terms deemed necessary by the authority to effect the 33 eligible business’s ongoing compliance with section 15.504. 34 2. The business shall satisfy all applicable terms of 35 -16- SF 657 (2) 91 nls/ko/mb 16/ 72

S.F. 657 the agreement by the project completion date; however, the 1 board may for good cause extend the project completion date or 2 otherwise amend the terms of the agreement. The board shall 3 not amend the terms of the agreement to allow an increase in 4 the maximum aggregate value of the tax incentives authorized by 5 the board under section 15.505, subsection 3. 6 3. The eligible business shall comply with all applicable 7 terms of the agreement until the agreement end date. An 8 eligible business shall maintain the business’s base employment 9 level until the agreement end date. 10 4. The eligible business shall not assign the agreement 11 to another entity without the advance written approval of the 12 board. 13 5. The authority may enforce the terms of the agreement as 14 necessary and appropriate. 15 Sec. 14. NEW SECTION . 15.507 Sales and use tax refund. 16 1. An eligible business that has been issued a tax incentive 17 certificate under the program shall be entitled to a refund, 18 as negotiated under section 15.505, subsection 3, of the sales 19 and use taxes paid under chapter 423 for gas, electricity, 20 water, and sewer utility services, tangible personal property, 21 or on services rendered, furnished, or performed to or for 22 a contractor or subcontractor and used in the fulfillment 23 of a written contract for the construction or equipping of 24 a facility that is part of the eligible business’s project. 25 Taxes attributable to intangible property and furniture and 26 furnishings shall not be refunded. 27 2. To receive the sales and use tax refund, the eligible 28 business shall file a claim with the department of revenue as 29 follows: 30 a. The contractor or subcontractor shall state under oath, 31 on forms provided by the department of revenue, the amount of 32 the sales of tangible personal property or services rendered, 33 furnished, or performed including water, sewer, gas, and 34 electric utility services upon which sales or use tax has been 35 -17- SF 657 (2) 91 nls/ko/mb 17/ 72

S.F. 657 paid during the period for which the refund is claimed, and 1 shall submit the forms to the eligible business before contract 2 completion. 3 b. The eligible business shall, no more frequently than 4 quarterly, submit an application to the department of revenue 5 for a refund of the amount of the sales and use taxes paid 6 pursuant to chapter 423 upon any tangible personal property, or 7 services rendered, furnished, or performed, including water, 8 sewer, gas, and electric utility services. The application 9 shall be submitted in the form and manner prescribed by the 10 department of revenue. The department of revenue shall audit 11 the application and, if approved, issue a warrant or warrants 12 to the eligible business in the amount of the sales or use tax 13 which has been paid to the state of Iowa under subsection 1. 14 The eligible business’s final application must be submitted to 15 the department of revenue within one year after the project 16 completion date. An application filed by the eligible business 17 in accordance with this section shall not be denied by reason 18 of a time limitation for filing a refund claim set forth in 19 section 423.47. 20 c. The refund shall be remitted by the department of 21 revenue to the eligible business as soon as practicable after 22 completion of the audit pursuant to paragraph “b” . Interest 23 shall not accrue on any part of the refund that has not yet been 24 remitted by the department of revenue to the eligible business. 25 3. A contractor or subcontractor that willfully makes a 26 false report of tax paid under this section is guilty of an 27 aggravated misdemeanor, and shall be liable for payment of the 28 tax and any applicable penalty and interest. 29 Sec. 15. NEW SECTION . 15.508 Qualifying investment tax 30 credit. 31 1. The authority may authorize a tax credit for an eligible 32 business pursuant to section 15.505, subsection 3. The 33 authority shall not issue a tax credit certificate to the 34 eligible business until the eligible business’s project or a 35 -18- SF 657 (2) 91 nls/ko/mb 18/ 72