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Senate File 574 - IntroducedA Bill ForAn Act 1establishing the major economic growth attraction
2program to be administered by the economic development
3authority, and providing penalties.
4BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
1 Section 1. Section 9I.3, subsection 3, Code 2023, is amended
2by adding the following new paragraph:
3 NEW PARAGRAPH. f. (1) An interest in agricultural land
4acquired by a foreign business for an immediate use other than
5farming if all of the following requirements are met:
6(a) The foreign business qualifies as an eligible business
7pursuant to section 15.283.
8(b) The foreign business is incorporated under the laws of
9a foreign country that is an allied country and the foreign
10business is wholly owned directly or indirectly by nonresident
11aliens of an allied country, or is a business entity, whether
12or not incorporated, which is wholly owned directly or
13indirectly by nonresident aliens of an allied country. As part
14of the foreign business’s application under section 15.284,
15the foreign business provides documentation to the authority,
16as deemed necessary by the authority, to establish that the
17foreign business is incorporated under the laws of a foreign
18country that is an allied country and the foreign business is
19wholly owned directly or indirectly by nonresident aliens of
20an allied country; or is a business entity, whether or not
21incorporated, which is wholly owned directly or indirectly by
22nonresident aliens of an allied country.
23(c) The agricultural land is a mega site, or included in a
24mega site.
25(d) The foreign business is not actively engaged in farming.
26(e) The board authorizes the acquisition of the
27agricultural land under the MEGA program administered by the
28economic development authority pursuant to sections 15.281
29through 15.289.
30(2) As used in this paragraph:
31(a) “Actively engaged in farming” means the same as defined
32in section 15.282.
33(b) “Allied country” means the same as defined in 10 U.S.C.
34§2350f(d)(1).
35(c) “Authority” means the economic development authority.
-1- 1(d) “Board” means the members of the authority appointed by
2the governor and in whom the powers of the authority are vested
3pursuant to section 15.105.
4(e) “Certified site” means a site that has been issued a
5certificate of readiness by the authority pursuant to section
615E.18.
7(f) “Mega site” means the same as defined in section 15.282.
8 Sec. 2. NEW SECTION. 15.281 Short title.
9This part shall be known and may be cited as the “Major
10Economic Growth Attraction Program” or “MEGA Program”.
11 Sec. 3. NEW SECTION. 15.282 Definitions.
12As used in this part, unless the context otherwise requires:
131. “Actively engaged in farming” means any of the following:
14a. Performing physical work which significantly contributes
15to crop or livestock production.
16b. Making or taking part in making decisions contributing to
17or affecting the success of a farm’s operations.
18c. Entering into a contractual relationship with an
19outside entity to farm agricultural land as part of a farm’s
20operations.
212. “Base employment level” means the number of full-time
22equivalent positions at a business, as established by the
23authority and the business using the business’s payroll
24records, as of the date the business applies for tax incentives
25under the program.
263. “Benefit” means nonwage compensation provided to an
27employee. “Benefits” include medical and dental insurance, a
28pension, a retirement plan, a profit-sharing plan, child care,
29life insurance, vision insurance, and disability insurance.
304. “Certified site” means a site that has been issued a
31certificate of readiness by the authority pursuant to section
3215E.18.
335. “Community” means a city, county, or entity established
34pursuant to chapter 28E.
356. “Contract completion” means the date of completion of
-2-1the terms of a contract between a contractor and an eligible
2business.
37. “Contractor” means a person that has executed a contract
4with an eligible business for the provision of property,
5materials, or services for the construction or equipping of a
6facility that is part of the eligible business’s project.
78. “Created jobs” or “create jobs” means new, permanent,
8full-time equivalent positions added to an eligible business’s
9payroll, at the location of the eligible business’s project, in
10excess of the eligible business’s base employment level.
119. “Data center business” means the same as defined in
12section 423.3, subsection 95.
1310. “Eligible business” means a business that meets the
14requirements of section 15.283.
1511. “Foreign business” means the same as defined in section
169I.1.
1712. “Full-time equivalent position” means a non-part-time
18position for the number of hours or days per week considered
19to be full-time work for the kind of service or work performed
20for an employer. Typically, a “full-time equivalent position”
21requires two thousand eighty hours of work in a calendar year,
22including all paid holidays, vacations, sick time, and other
23paid leave.
2413. “Maintenance period” means the period of time between
25the project completion date and the maintenance period
26completion date during which an eligible business must maintain
27all created jobs per the agreement under section 15.285.
2814. “Maintenance period completion date” means the date on
29which the maintenance period ends.
3015. “Mega site” means a certified site greater than one
31thousand acres.
3216. “Program” means the major economic growth attraction
33program.
3417. “Project” means an activity or set of activities
35directly related to the start-up or location of an eligible
-3-1business, proposed in an eligible business’s application to the
2program, that will accomplish the goals of the program.
318. “Project completion date” means the date by which an
4eligible business that has been approved by the authority to
5participate in the program agrees to complete the terms and
6conditions of the agreement under section 15.285.
719. “Project completion period” means the period of time
8between the date the authority approves an eligible business to
9participate in the program and the project completion date.
1020. “Qualifying investment” means a capital investment
11in real property located on a certified site, including the
12purchase price of the land, site preparation, infrastructure,
13and building construction for use in the operation of an
14eligible business. “Qualifying investment” also means a capital
15investment in depreciable assets for use in the operation of an
16eligible business.
1721. “Qualifying wage threshold” means the mean wage level
18represented by the wages within two standard deviations of
19the mean wage within the laborshed area in which the eligible
20business is located, as calculated by the authority by rule,
21using the most current covered wage and employment data
22available from the department of workforce development for the
23laborshed area in which the eligible business is located.
2422. “Subcontractor” means a person that contracts with
25a contractor for the provision of property, materials, or
26services for the construction or equipping of a facility that
27is part of an eligible business’s project.
2823. “Tax incentives” means tax credits, tax refunds, or tax
29exemptions authorized under the program by the authority for an
30eligible business.
31 Sec. 4. NEW SECTION. 15.283 Eligible business.
321. To be eligible to receive tax incentives under
33the program, a business must meet all of the following
34requirements:
35a. The business’s proposed project must be located on a
-4-1certified site greater than two hundred fifty acres that the
2authority has determined is suitable for the project.
3b. The business’s qualifying investment in the proposed
4project must exceed one billion dollars.
5c. The community in which the proposed project is located
6must approve the project either by ordinance or resolution.
7d. (1) The business must be primarily engaged in advanced
8manufacturing, biosciences, or research and development.
9The business shall not be a data center business, a retail
10business, or a business where a cover charge or membership
11requirement restricts certain individuals from entering the
12business.
13(2) Factors the authority shall consider to determine if
14a business is primarily engaged in advanced manufacturing,
15biosciences, or research and development shall include but are
16not limited to all of the following:
17(a) The business’s North American industry classification
18system code.
19(b) The business’s main sources of revenue.
20(c) The business’s customer base.
21e. (1) The business must not be solely relocating
22operations from one area of the state to another area of
23the state. A proposed project that does not create jobs or
24involve a substantial amount of new capital investment shall
25be presumed to be a relocation of operations. For purposes of
26this subparagraph, the authority shall consider a letter from
27the affected local community’s government officials supporting
28the business’s move away from the affected local community
29in making a determination whether the business is solely
30relocating operations.
31(2) This paragraph shall not be construed to prohibit
32a business from expanding the business’s operations in a
33community if the business has similar operations in this state
34that are not closing or undergoing a substantial reduction in
35operations.
-5- 1f. The business must create jobs as part of the business’s
2proposed project. The business must demonstrate that the
3created jobs will pay at least one hundred forty percent of the
4qualifying wage threshold by the project completion date, and
5through the maintenance period completion date.
6g. The business must provide comprehensive benefits to
7each employee employed in a created job. The authority may
8adopt rules under chapter 17A to determine the requirements for
9comprehensive benefits.
10h. (1) The business must not have a record of violations
11of the law or of regulations, including but not limited to
12antitrust, environmental, trade, or worker safety, that over
13a period of time show a consistent pattern or that establish
14the business’s intentional, criminal, or reckless conduct in
15violation of such laws or regulations.
16(2) If the authority determines that the business has a
17record of violations described in subparagraph (1), and the
18authority finds that the violations did not seriously affect
19public health, public safety, or the environment, the business
20may be eligible to qualify for tax incentives, and an exemption
21under section 9I.3, subsection 3, paragraph “f”, under the
22program.
23(3) If the authority determines that the business has
24a record of violations described in subparagraph (1), and
25the authority finds that there were mitigating circumstances
26related to the violations, the business may be eligible to
27qualify for tax incentives under the program.
28(4) In making determinations and findings under
29subparagraphs (2) and (3), and making a determination whether a
30business is disqualified from the program, the authority shall
31be exempt from chapter 17A.
322. a. In determining if a business is eligible to
33participate in the program, the authority shall consider a
34variety of factors, including but not limited to all of the
35following:
-6- 1(1) The quality of the business’s proposed project’s
2created jobs. The authority shall place greater emphasis on
3created jobs that are high wage, low turnover, that provide
4comprehensive benefits, and that expose employees to minimal
5occupational hazards. A business that pays wages substantially
6below that of similar businesses located in the same geographic
7area shall not be given priority under the program.
8(2) The impact of the business’s proposed project on
9businesses that are in competition with the business.
10The authority shall make a good-faith effort to identify
11existing Iowa businesses in competition with the business
12being considered for the program. The authority shall make
13a good-faith effort to determine the probability that any
14proposed tax incentives will displace employees of the
15competing businesses. In determining the impact on the
16competing businesses, created jobs resulting from employees
17being displaced from the competing businesses shall not be
18counted as created jobs for the applying business’s project.
19(3) The business’s proposed project’s economic impact
20on the state. The authority shall place greater emphasis
21on businesses and proposed projects that meet the following
22requirements:
23(a) The business has a high proportion of in-state
24suppliers.
25(b) The proposed project will diversify the state economy.
26(c) The business has few in-state competitors.
27(d) The proposed project has the potential to create jobs on
28an ongoing basis.
29(e) Any other factors the authority deems relevant in
30determining the economic impact of a proposed project.
31 Sec. 5. NEW SECTION. 15.284 Applications — authorization
32of tax credits and exemptions.
331. Applications for the program shall be submitted to the
34authority in the form and manner prescribed by the authority by
35rule. Each application must be accompanied by an application
-7-1fee in an amount determined by the authority by rule.
22. In determining the eligibility of a business to
3participate in the program, the authority may engage outside
4experts to complete a technical, financial, or other review
5of an application submitted by a business if such review is
6outside the expertise of the authority.
73. a. The authority and the board may negotiate with an
8eligible business regarding the terms of, and the aggregate
9value of, the tax incentives the eligible business may receive
10under the program.
11b. The board may authorize any combination of tax incentives
12available under the program for an eligible business.
134. The board may authorize an exemption to restrictions on
14agricultural land holdings pursuant to section 9I.3, subsection
153, paragraph “f”.
16 Sec. 6. NEW SECTION. 15.285 Agreement.
171. An eligible business that is approved by the authority to
18participate in the program shall enter into an agreement with
19the authority that specifies the criteria for the successful
20completion of all requirements of the program. The agreement
21must contain, at a minimum, provisions related to all of the
22following:
23a. The eligible business must certify to the authority
24annually that the business is in compliance with the agreement.
25b. If the eligible business fails to comply with any
26requirements of the program or the agreement, the eligible
27business may be required to repay any tax incentives the
28authority issued to the eligible business. A required
29repayment of a tax incentive shall be considered a tax payment
30due and payable to the department of revenue by any taxpayer
31that claimed the tax incentive, and the failure to make the
32repayment may be treated by the department of revenue in the
33same manner as a failure to pay the tax shown due, or required
34to be shown due, with the filing of a return or deposit form.
35c. If the eligible business undergoes a layoff or
-8-1permanently closes any of its facilities within the state, the
2eligible business may be subject to all of the following:
3(1) A reduction or elimination of some or all of the tax
4incentives the authority issued to the eligible business.
5(2) Repayment of any tax incentives that the business
6has claimed, and payment of any penalties assessed by the
7department of revenue.
8d. The project completion date, the maintenance period
9completion date, the required number of created jobs, the
10qualifying wage threshold that is applicable to the project,
11the amount of qualifying investment, the maximum aggregate
12value of the tax incentives authorized by the board, and any
13other terms and obligations the authority deems necessary.
14e. The eligible business shall only employ individuals
15legally authorized to work in this state. If the eligible
16business is found to knowingly employ individuals who are
17not legally authorized to work in this state, in addition
18to any penalties provided by law, all or a portion of any
19tax incentives issued by the authority shall be subject to
20recapture by the authority or the department of revenue.
21f. The maximum amount of gross wages, not to exceed three
22percent, that the eligible business may withhold under section
2315.286B, and the time period, not to exceed the term of the
24agreement, during which the specified amount of gross wages may
25be withheld.
26g. Any terms deemed necessary by the authority to effect the
27eligible business’s ongoing compliance with section 15.283.
282. The business shall satisfy all applicable terms of
29the agreement by the project completion date; however, the
30board may for good cause extend the project completion date or
31otherwise amend the terms of the agreement. The board shall
32not amend the terms of the agreement to allow an increase in
33the maximum aggregate value of the tax incentives authorized by
34the board under section 15.284, subsection 3.
353. The eligible business shall comply with all applicable
-9-1terms of the agreement during the maintenance period.
24. The eligible business shall not assign the agreement
3to another entity without the advance written approval of the
4board.
55. The authority may enforce the terms of the agreement as
6necessary and appropriate.
7 Sec. 7. NEW SECTION. 15.286 Sales and use tax refund.
81. An eligible business that has been issued a tax incentive
9certificate under the program shall be entitled to a refund
10of the sales and use taxes paid under chapter 423 for gas,
11electricity, water, and sewer utility services, tangible
12personal property, or on services rendered, furnished, or
13performed to or for a contractor or subcontractor and used in
14the fulfillment of a written contract for the construction or
15equipping of a facility that is part of the eligible business’s
16project. Taxes attributable to intangible property and
17furniture and furnishings shall not be refunded.
182. To receive the sales and use tax refund, the eligible
19business shall file a claim with the department of revenue as
20follows:
21a. The contractor or subcontractor shall state under oath,
22on forms provided by the department of revenue, the amount of
23the sales of tangible personal property or services rendered,
24furnished, or performed including water, sewer, gas, and
25electric utility services upon which sales or use tax has been
26paid prior to contract completion, and shall submit the forms
27to the eligible business before contract completion.
28b. The eligible business shall inform the department of
29revenue in writing of contract completion. The eligible
30business shall, after contract completion, submit an
31application to the department of revenue for a refund of the
32amount of the sales and use taxes paid pursuant to chapter 423
33upon any tangible personal property, or services rendered,
34furnished, or performed, including water, sewer, gas, and
35electric utility services. The application shall be submitted
-10-1in the form and manner prescribed by the department of revenue.
2The department of revenue shall audit the application and,
3if approved, issue a warrant or warrants to the eligible
4business in the amount of the sales or use tax which has been
5paid to the state of Iowa under subsection 1. The eligible
6business’s application must be submitted to the department of
7revenue within one year after the project completion date. An
8application filed by the eligible business in accordance with
9this section shall not be denied by reason of a limitation set
10forth in chapter 421 or 423.
11c. The refund shall be remitted by the department of revenue
12to the eligible business equally over five tax years. Interest
13shall not accrue on any part of the refund that has not yet been
14remitted by the department of revenue to the eligible business.
153. A contractor or subcontractor that willfully makes a
16false report of tax paid under this section is guilty of an
17aggravated misdemeanor, and shall be liable for payment of the
18tax and any applicable penalty and interest.
19 Sec. 8. NEW SECTION. 15.286A Qualifying investment tax
20credit.
211. The authority may authorize a tax credit for an eligible
22business that is up to five percent of the eligible business’s
23qualifying investment in a certified site. The authority shall
24not issue a tax credit certificate to the eligible business
25until the eligible business’s project has been placed in
26service, and at least fifty percent of the created jobs the
27eligible business agreed to in the agreement under section
2815.285, and that pay at least one hundred forty percent of the
29qualifying wage threshold, have been added to the eligible
30business’s payroll. The department of revenue shall remit
31the tax credit to the eligible business equally over five tax
32years. The tax credit shall be allowed against taxes imposed
33under chapter 422, subchapter II, III, or V, and against the
34moneys and credits tax imposed in section 533.329. If the
35eligible business is a partnership, S corporation, limited
-11-1liability company, cooperative organized under chapter 501 and
2filing as a partnership for federal tax purposes, or estate
3or trust electing to have the income taxed directly to the
4individual, an individual may claim the tax credit allowed.
5The amount claimed by the individual shall be based upon the
6pro rata share of the individual’s earnings of the partnership,
7S corporation, limited liability company, cooperative organized
8under chapter 501 and filing as a partnership for federal tax
9purposes, or estate or trust. Any tax credit in excess of
10the eligible business’s tax liability for the tax year may be
11refunded or, at the eligible business’s election, credited to
12the eligible business’s tax liability in any of the following
13five consecutive tax years or until depleted, whichever occurs
14first. The eligible business shall make such election prior to
15the authority issuing a tax credit certificate to the eligible
16business, and the eligible business’s election shall be noted
17on the tax credit certificate. A tax credit shall not be
18carried back to a tax year prior to the tax year in which the
19tax credit is first claimed by the eligible business.
202. If within five years of the date the authority issues
21an eligible business a tax credit under subsection 1, the
22eligible business sells, disposes of, razes, or otherwise
23renders unusable all or a part of the land, buildings, or
24other structures for which the tax credit was claimed under
25this section, the tax liability of the eligible business for
26the year in which all or part of the land, buildings, or other
27existing structures are sold, disposed of, razed, or otherwise
28rendered unusable shall be increased by one of the following
29amounts:
30a. One hundred percent of the tax credit claimed under
31this section if all or a part of the land, buildings, or other
32structures for which the tax credit was claimed under this
33section cease to be eligible for the tax credit within one
34year after the date the authority issued the tax credit to the
35eligible business.
-12- 1b. Eighty percent of the tax credit claimed under this
2section if all or a part of the land, buildings, or other
3structures for which the tax credit was claimed under this
4section cease to be eligible for the tax credit within two
5years after the date the authority issued the tax credit to the
6eligible business.
7c. Sixty percent of the tax credit claimed under this
8section if all or a part of the land, buildings, or other
9structures for which the tax credit was claimed under this
10section cease to be eligible for the tax credit within three
11years after the date the authority issued the tax credit to the
12eligible business.
13d. Forty percent of the tax credit claimed under this
14section if all or a part of the land, buildings, or other
15structures for which the tax credit was claimed under this
16section cease to be eligible for the tax credit within four
17years after the date the authority issued the tax credit to the
18eligible business.
19e. Twenty percent of the tax credit claimed under this
20section if all or a part of the land, buildings, or other
21structures for which the tax credit was claimed under this
22section cease to be eligible for the tax credit within five
23years after the date the authority issued the tax credit to the
24eligible business.
25 Sec. 9. NEW SECTION. 15.286B Withholding tax credit.
261. From the remittance due to the department of revenue
27pursuant to section 422.16, subsection 2, an eligible business
28may withhold an amount, pursuant to section 15.285, subsection
291, paragraph “f”, of the gross wages paid to each employee in a
30created job that pays at least the qualifying wage threshold
31pursuant to the agreement under section 15.285.
322. If the amount withheld under subsection 1 is less than
33three percent of the gross wages paid to each employee in a
34created job that pays at least one hundred forty percent of
35the qualifying wage threshold, the eligible business shall
-13-1receive a credit against the remaining withholding taxes due
2from the eligible business, or the eligible business may carry
3the credit forward up to five consecutive tax years or until
4depleted, whichever is earlier.
53. In any tax year, the aggregate amount of withholding tax
6credit under this section and under any other program for which
7an eligible business is receiving a withholding tax credit
8shall not exceed the amount the eligible business is required
9to deduct and remit to the department of revenue under section
10422.16, subsection 2, for that tax year.
11 Sec. 10. NEW SECTION. 15.287 Foreign businesses —
12acquisition of agricultural land.
131. If a foreign business’s proposed project is located on a
14mega site that includes agricultural land, the requirements of
15section 9I.3, subsection 3, paragraph “f”, must be satisfied in
16order for the foreign business to be eligible for the program.
172. a. A foreign business under subsection 1 that is
18approved by the authority to participate in the program shall
19enter into an agreement with the authority pursuant to section
2015.285. The agreement shall include a provision that requires
21the foreign business to comply with chapter 9I, and specifies
22that failure to do so may result in revocation of all tax
23incentives issued by the authority to the foreign business.
24b. The authority may grant the foreign business one or
25more one-year extensions in which the foreign business must
26comply with section 9I.4. The authority shall not grant
27more than five one-year extensions. The community in which
28the agricultural land is located must approve each one-year
29extension by ordinance or resolution prior to the authority
30granting each extension. The foreign business shall comply
31with the remaining provisions of chapter 9I to the extent the
32provisions do not conflict with this section.
33 Sec. 11. NEW SECTION. 15.288 Other incentives.
341. Except for the high quality jobs program administered
35by the authority pursuant to sections 15.326 through 15.336,
-14-1and the targeted jobs withholding credit pursuant to section
2403.19A, an eligible business may apply for and be eligible to
3receive other federal, state, and local incentives in addition
4to the tax incentives issued by the authority to the eligible
5business under the program.
62. The authority, in its discretion, may prohibit an
7eligible business that has been issued tax incentives under
8the program from receiving any additional tax incentive, tax
9credit, grant, loan, or other financial assistance under any
10program administered by the authority.
11 Sec. 12. NEW SECTION. 15.289 Property tax exemption.
121. A community in which an eligible business’s project
13is located may grant the eligible business a property
14tax exemption for a portion of the actual value added by
15improvements to real property directly related to the eligible
16business’s created jobs. The community may allow a property
17tax exemption for a period not to exceed twenty years beginning
18the year that the improvements to real property are first
19assessed for taxation.
202. For purposes of this section, “improvements” means new
21construction, and rehabilitation of and additions to existing
22structures.
233. A property tax exemption granted under subsection 1 shall
24apply to all taxing districts, except for school districts, in
25which the real property is located.
26 Sec. 13. NEW SECTION. 15.290 Restrictions on board.
27The board shall not authorize tax incentives available under
28the program, or an exemption to restrictions on agricultural
29land holdings pursuant to section 9I.3, subsection 3, paragraph
30“f”, for more than two eligible businesses, or on or after
31January 1, 2026, whichever occurs first.
32EXPLANATION
33The inclusion of this explanation does not constitute agreement with
34the explanation’s substance by the members of the general assembly.
35This bill establishes a major economic growth attraction
-15-1program (program) to be administered by the economic
2development authority (authority).
3To be eligible to receive tax incentives (incentives) under
4the program, a business’s proposed project (project) must be
5located on a certified site greater than 250 acres that the
6authority has determined is suitable for the project, and the
7business’s qualifying investment in the project must exceed $1
8billion. Other requirements for a business to be eligible for
9the program are detailed in the bill. “Qualifying investment”
10is defined in the bill as a capital investment in real property
11located on a certified site, including the purchase price
12of the land, site preparation, infrastructure, and building
13construction for use in the operation of an eligible business.
14“Qualifying investment” also means a capital investment in
15depreciable assets for use in the operation of an eligible
16business. “Certified site” is defined as a site that has been
17issued a certificate of readiness by the authority pursuant to
18Code section 15E.18. “Tax incentives” and “project” are also
19defined in the bill.
20In determining if a business is eligible to participate
21in the program, the authority shall consider a variety of
22factors, including but not limited to whether the jobs created
23by the business’s project are high wage, low turnover, provide
24comprehensive benefits, and expose employees to minimal
25occupational hazards; the impact of the project on businesses
26that compete with the business applying to the program; and
27the project’s economic impact on the state. The bill requires
28the authority to place greater emphasis on businesses that
29have a high proportion of in-state suppliers and few in-state
30competitors; and on projects that diversify the state economy
31and have the potential to create jobs on an ongoing basis.
32Applications for the program shall be submitted in the
33form and manner prescribed by the authority by rule and be
34accompanied by an application fee in an amount determined by
35the authority by rule. In determining a business’s eligibility
-16-1for the program, the authority may engage outside experts
2to complete a technical, financial, or other review of an
3application if such review is outside the expertise of the
4authority. The authority and the authority’s board (board)
5may negotiate with an eligible business regarding the terms
6of, and the aggregate value of, the incentives the eligible
7business may receive under the program. The board may
8authorize any combination of incentives available under the
9program for an eligible business. The board may authorize an
10exemption to restrictions on agricultural land holdings for a
11foreign business that qualifies for the program pursuant to
12the requirements detailed in the bill. “Foreign business” is
13defined in the bill.
14The bill requires an eligible business that is approved to
15participate in the program to enter into an agreement with
16the authority (agreement) that specifies the criteria for the
17successful completion of all requirements of the program.
18The agreement shall contain, at a minimum, the provisions
19as detailed in the bill. The business shall satisfy all
20applicable terms of the agreement by the project completion
21date; however, the board may for good cause extend the project
22completion date or otherwise amend the terms of the agreement.
23The board shall not amend the terms of the agreement to allow
24an increase in the maximum aggregate value of the incentives
25authorized by the board. “Project completion date” is defined
26in the bill. The bill permits the authority to enforce the
27terms of the agreement as necessary and appropriate.
28An eligible business that has been issued a certificate
29under the program shall be entitled to a refund of the sales
30and use taxes (refund) paid under Code chapter 423 for gas,
31electricity, water, and sewer utility services, tangible
32personal property, or on services rendered, furnished, or
33performed to or for a contractor or subcontractor and used
34in the fulfillment of a written contract relating to the
35construction or equipping of a facility that is part of the
-17-1eligible business’s project. Taxes attributable to intangible
2property and furniture and furnishings shall not be refunded.
3The procedure for the business to receive the refund is
4detailed in the bill. The refund shall be remitted by the
5department of revenue (department) to the eligible business
6equally over five tax years. Interest shall not accrue on
7any part of the refund not yet remitted by the department to
8the eligible business. A contractor or subcontractor that
9willfully makes a false report of tax paid is guilty of an
10aggravated misdemeanor, and shall be liable for payment of the
11tax and any applicable penalty and interest. An aggravated
12misdemeanor is punishable by confinement for no more than two
13years and a fine of at least $855 but not more than $8,540.
14The authority may authorize a tax credit for an eligible
15business that is up to 5 percent of the business’s qualifying
16investment in a certified site. The authority shall not
17issue a tax credit certificate until the eligible business’s
18project has been placed in service, and at least 50 percent
19of the created jobs the eligible business agreed to in the
20agreement, and that pay at least 140 percent of the qualifying
21wage threshold, have been added to the eligible business’s
22payroll. “Created job” and “qualifying wage threshold” are
23defined in the bill. The department shall remit the tax credit
24to the eligible business equally over five tax years. The
25tax credit shall be allowed against taxes imposed under Code
26chapter 422, subchapter II, III, or V, and against the moneys
27and credits tax imposed in Code section 533.329. Any tax
28credit in excess of the eligible business’s tax liability for
29the tax year may be refunded or, at the eligible business’s
30election, credited to the eligible business’s tax liability
31in each of the following five consecutive tax years or until
32depleted, whichever occurs first. The eligible business
33shall make such election prior to the authority issuing a
34tax credit certificate to the eligible business, and the
35eligible business’s election shall be noted on the tax credit
-18-1certificate. A tax credit shall not be carried back to a tax
2year prior to the tax year in which the tax credit is first
3claimed by the eligible business. If within five years of the
4date the authority issues an eligible business a qualifying
5investment tax credit the eligible business sells, disposes
6of, razes, or otherwise renders unusable all or a part of the
7land, buildings, or other structures for which the tax credit
8was claimed, the tax liability of the eligible business for
9the year in which all or part of the land, buildings, or other
10existing structures are sold, disposed of, razed, or otherwise
11rendered unusable shall be increased by an amount as detailed
12in the bill.
13From the remittance due to the department pursuant to Code
14section 422.16(2), an eligible business may withhold the
15amount specified in the agreement, not to exceed 3 percent, of
16the gross wages paid to each employee in a created job that
17pays at least the qualifying wage threshold specified in the
18agreement. The withholding may occur for the time period,
19not to exceed the term of the agreement, specified in the
20agreement. If the amount withheld is less than 3 percent of
21the gross wages paid to each employee in a created job, the
22eligible business shall receive a credit against the remaining
23withholding taxes due from the business, or the business may
24carry the credit forward up to five consecutive tax years or
25until depleted, whichever is earlier. In any tax year, the
26aggregate amount of withholding tax credit under this program,
27and any other program for which an eligible business is
28receiving a withholding tax credit, shall not exceed the amount
29the eligible business is required to deduct and remit to the
30department under Code section 422.16(2) for that tax year.
31If a foreign business’s proposed project is located on a
32mega site that includes agricultural land, the requirements as
33detailed in the bill must be satisfied for the foreign business
34to be eligible for the program. “Mega site” is defined in the
35bill as a certified site greater than 1,000 acres. A foreign
-19-1business that is approved by the authority to participate in
2the program shall enter into an agreement with the authority
3that includes a provision that requires the foreign business
4to comply with Code chapter 9I, and specifies that failure to
5do so may result in revocation of incentives issued by the
6authority to the foreign business. The authority may grant the
7foreign business one or more one-year extensions in which the
8foreign business must come into compliance with Code section
99I.4. The authority shall not grant a business more than five
10one-year extensions. The community in which the agricultural
11land is located must approve each extension by ordinance or
12resolution prior to the authority granting each extension.
13Except for the high quality jobs program, and the targeted
14jobs withholding credit, an eligible business may apply
15for and be eligible to receive other federal, state, and
16local incentives in addition to the incentives the authority
17issues to the business under the program. The authority, in
18its discretion, may prohibit an eligible business that has
19been issued incentives under the program from receiving any
20additional tax incentive, tax credit, grant, loan, or other
21financial assistance under any program administered by the
22authority.
23The bill allows a community in which an eligible business’s
24project is located to grant the eligible business a property
25tax exemption (exemption) for a portion of the actual value
26added by improvements to real property directly related
27to the eligible business’s created jobs. The community
28may allow an exemption for a period not to exceed 20 years
29beginning the year that the improvements are first assessed
30for taxation. “Improvements” is defined as new construction,
31and rehabilitation of and additions to existing structures.
32An exemption granted by a community shall apply to all taxing
33districts, except for school districts, in which the real
34property is located.
35The board shall not authorize incentives available under the
-20-1program, or an exemption to restrictions on agricultural land
2holdings pursuant to Code section 9I.3(3)(f), for more than two
3eligible businesses, or on or after January 1, 2026, whichever
4occurs first.
-21-ko/jh
2program to be administered by the economic development
3authority, and providing penalties.
4BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
1 Section 1. Section 9I.3, subsection 3, Code 2023, is amended
2by adding the following new paragraph:
3 NEW PARAGRAPH. f. (1) An interest in agricultural land
4acquired by a foreign business for an immediate use other than
5farming if all of the following requirements are met:
6(a) The foreign business qualifies as an eligible business
7pursuant to section 15.283.
8(b) The foreign business is incorporated under the laws of
9a foreign country that is an allied country and the foreign
10business is wholly owned directly or indirectly by nonresident
11aliens of an allied country, or is a business entity, whether
12or not incorporated, which is wholly owned directly or
13indirectly by nonresident aliens of an allied country. As part
14of the foreign business’s application under section 15.284,
15the foreign business provides documentation to the authority,
16as deemed necessary by the authority, to establish that the
17foreign business is incorporated under the laws of a foreign
18country that is an allied country and the foreign business is
19wholly owned directly or indirectly by nonresident aliens of
20an allied country; or is a business entity, whether or not
21incorporated, which is wholly owned directly or indirectly by
22nonresident aliens of an allied country.
23(c) The agricultural land is a mega site, or included in a
24mega site.
25(d) The foreign business is not actively engaged in farming.
26(e) The board authorizes the acquisition of the
27agricultural land under the MEGA program administered by the
28economic development authority pursuant to sections 15.281
29through 15.289.
30(2) As used in this paragraph:
31(a) “Actively engaged in farming” means the same as defined
32in section 15.282.
33(b) “Allied country” means the same as defined in 10 U.S.C.
34§2350f(d)(1).
35(c) “Authority” means the economic development authority.
-1- 1(d) “Board” means the members of the authority appointed by
2the governor and in whom the powers of the authority are vested
3pursuant to section 15.105.
4(e) “Certified site” means a site that has been issued a
5certificate of readiness by the authority pursuant to section
615E.18.
7(f) “Mega site” means the same as defined in section 15.282.
8 Sec. 2. NEW SECTION. 15.281 Short title.
9This part shall be known and may be cited as the “Major
10Economic Growth Attraction Program” or “MEGA Program”.
11 Sec. 3. NEW SECTION. 15.282 Definitions.
12As used in this part, unless the context otherwise requires:
131. “Actively engaged in farming” means any of the following:
14a. Performing physical work which significantly contributes
15to crop or livestock production.
16b. Making or taking part in making decisions contributing to
17or affecting the success of a farm’s operations.
18c. Entering into a contractual relationship with an
19outside entity to farm agricultural land as part of a farm’s
20operations.
212. “Base employment level” means the number of full-time
22equivalent positions at a business, as established by the
23authority and the business using the business’s payroll
24records, as of the date the business applies for tax incentives
25under the program.
263. “Benefit” means nonwage compensation provided to an
27employee. “Benefits” include medical and dental insurance, a
28pension, a retirement plan, a profit-sharing plan, child care,
29life insurance, vision insurance, and disability insurance.
304. “Certified site” means a site that has been issued a
31certificate of readiness by the authority pursuant to section
3215E.18.
335. “Community” means a city, county, or entity established
34pursuant to chapter 28E.
356. “Contract completion” means the date of completion of
-2-1the terms of a contract between a contractor and an eligible
2business.
37. “Contractor” means a person that has executed a contract
4with an eligible business for the provision of property,
5materials, or services for the construction or equipping of a
6facility that is part of the eligible business’s project.
78. “Created jobs” or “create jobs” means new, permanent,
8full-time equivalent positions added to an eligible business’s
9payroll, at the location of the eligible business’s project, in
10excess of the eligible business’s base employment level.
119. “Data center business” means the same as defined in
12section 423.3, subsection 95.
1310. “Eligible business” means a business that meets the
14requirements of section 15.283.
1511. “Foreign business” means the same as defined in section
169I.1.
1712. “Full-time equivalent position” means a non-part-time
18position for the number of hours or days per week considered
19to be full-time work for the kind of service or work performed
20for an employer. Typically, a “full-time equivalent position”
21requires two thousand eighty hours of work in a calendar year,
22including all paid holidays, vacations, sick time, and other
23paid leave.
2413. “Maintenance period” means the period of time between
25the project completion date and the maintenance period
26completion date during which an eligible business must maintain
27all created jobs per the agreement under section 15.285.
2814. “Maintenance period completion date” means the date on
29which the maintenance period ends.
3015. “Mega site” means a certified site greater than one
31thousand acres.
3216. “Program” means the major economic growth attraction
33program.
3417. “Project” means an activity or set of activities
35directly related to the start-up or location of an eligible
-3-1business, proposed in an eligible business’s application to the
2program, that will accomplish the goals of the program.
318. “Project completion date” means the date by which an
4eligible business that has been approved by the authority to
5participate in the program agrees to complete the terms and
6conditions of the agreement under section 15.285.
719. “Project completion period” means the period of time
8between the date the authority approves an eligible business to
9participate in the program and the project completion date.
1020. “Qualifying investment” means a capital investment
11in real property located on a certified site, including the
12purchase price of the land, site preparation, infrastructure,
13and building construction for use in the operation of an
14eligible business. “Qualifying investment” also means a capital
15investment in depreciable assets for use in the operation of an
16eligible business.
1721. “Qualifying wage threshold” means the mean wage level
18represented by the wages within two standard deviations of
19the mean wage within the laborshed area in which the eligible
20business is located, as calculated by the authority by rule,
21using the most current covered wage and employment data
22available from the department of workforce development for the
23laborshed area in which the eligible business is located.
2422. “Subcontractor” means a person that contracts with
25a contractor for the provision of property, materials, or
26services for the construction or equipping of a facility that
27is part of an eligible business’s project.
2823. “Tax incentives” means tax credits, tax refunds, or tax
29exemptions authorized under the program by the authority for an
30eligible business.
31 Sec. 4. NEW SECTION. 15.283 Eligible business.
321. To be eligible to receive tax incentives under
33the program, a business must meet all of the following
34requirements:
35a. The business’s proposed project must be located on a
-4-1certified site greater than two hundred fifty acres that the
2authority has determined is suitable for the project.
3b. The business’s qualifying investment in the proposed
4project must exceed one billion dollars.
5c. The community in which the proposed project is located
6must approve the project either by ordinance or resolution.
7d. (1) The business must be primarily engaged in advanced
8manufacturing, biosciences, or research and development.
9The business shall not be a data center business, a retail
10business, or a business where a cover charge or membership
11requirement restricts certain individuals from entering the
12business.
13(2) Factors the authority shall consider to determine if
14a business is primarily engaged in advanced manufacturing,
15biosciences, or research and development shall include but are
16not limited to all of the following:
17(a) The business’s North American industry classification
18system code.
19(b) The business’s main sources of revenue.
20(c) The business’s customer base.
21e. (1) The business must not be solely relocating
22operations from one area of the state to another area of
23the state. A proposed project that does not create jobs or
24involve a substantial amount of new capital investment shall
25be presumed to be a relocation of operations. For purposes of
26this subparagraph, the authority shall consider a letter from
27the affected local community’s government officials supporting
28the business’s move away from the affected local community
29in making a determination whether the business is solely
30relocating operations.
31(2) This paragraph shall not be construed to prohibit
32a business from expanding the business’s operations in a
33community if the business has similar operations in this state
34that are not closing or undergoing a substantial reduction in
35operations.
-5- 1f. The business must create jobs as part of the business’s
2proposed project. The business must demonstrate that the
3created jobs will pay at least one hundred forty percent of the
4qualifying wage threshold by the project completion date, and
5through the maintenance period completion date.
6g. The business must provide comprehensive benefits to
7each employee employed in a created job. The authority may
8adopt rules under chapter 17A to determine the requirements for
9comprehensive benefits.
10h. (1) The business must not have a record of violations
11of the law or of regulations, including but not limited to
12antitrust, environmental, trade, or worker safety, that over
13a period of time show a consistent pattern or that establish
14the business’s intentional, criminal, or reckless conduct in
15violation of such laws or regulations.
16(2) If the authority determines that the business has a
17record of violations described in subparagraph (1), and the
18authority finds that the violations did not seriously affect
19public health, public safety, or the environment, the business
20may be eligible to qualify for tax incentives, and an exemption
21under section 9I.3, subsection 3, paragraph “f”, under the
22program.
23(3) If the authority determines that the business has
24a record of violations described in subparagraph (1), and
25the authority finds that there were mitigating circumstances
26related to the violations, the business may be eligible to
27qualify for tax incentives under the program.
28(4) In making determinations and findings under
29subparagraphs (2) and (3), and making a determination whether a
30business is disqualified from the program, the authority shall
31be exempt from chapter 17A.
322. a. In determining if a business is eligible to
33participate in the program, the authority shall consider a
34variety of factors, including but not limited to all of the
35following:
-6- 1(1) The quality of the business’s proposed project’s
2created jobs. The authority shall place greater emphasis on
3created jobs that are high wage, low turnover, that provide
4comprehensive benefits, and that expose employees to minimal
5occupational hazards. A business that pays wages substantially
6below that of similar businesses located in the same geographic
7area shall not be given priority under the program.
8(2) The impact of the business’s proposed project on
9businesses that are in competition with the business.
10The authority shall make a good-faith effort to identify
11existing Iowa businesses in competition with the business
12being considered for the program. The authority shall make
13a good-faith effort to determine the probability that any
14proposed tax incentives will displace employees of the
15competing businesses. In determining the impact on the
16competing businesses, created jobs resulting from employees
17being displaced from the competing businesses shall not be
18counted as created jobs for the applying business’s project.
19(3) The business’s proposed project’s economic impact
20on the state. The authority shall place greater emphasis
21on businesses and proposed projects that meet the following
22requirements:
23(a) The business has a high proportion of in-state
24suppliers.
25(b) The proposed project will diversify the state economy.
26(c) The business has few in-state competitors.
27(d) The proposed project has the potential to create jobs on
28an ongoing basis.
29(e) Any other factors the authority deems relevant in
30determining the economic impact of a proposed project.
31 Sec. 5. NEW SECTION. 15.284 Applications — authorization
32of tax credits and exemptions.
331. Applications for the program shall be submitted to the
34authority in the form and manner prescribed by the authority by
35rule. Each application must be accompanied by an application
-7-1fee in an amount determined by the authority by rule.
22. In determining the eligibility of a business to
3participate in the program, the authority may engage outside
4experts to complete a technical, financial, or other review
5of an application submitted by a business if such review is
6outside the expertise of the authority.
73. a. The authority and the board may negotiate with an
8eligible business regarding the terms of, and the aggregate
9value of, the tax incentives the eligible business may receive
10under the program.
11b. The board may authorize any combination of tax incentives
12available under the program for an eligible business.
134. The board may authorize an exemption to restrictions on
14agricultural land holdings pursuant to section 9I.3, subsection
153, paragraph “f”.
16 Sec. 6. NEW SECTION. 15.285 Agreement.
171. An eligible business that is approved by the authority to
18participate in the program shall enter into an agreement with
19the authority that specifies the criteria for the successful
20completion of all requirements of the program. The agreement
21must contain, at a minimum, provisions related to all of the
22following:
23a. The eligible business must certify to the authority
24annually that the business is in compliance with the agreement.
25b. If the eligible business fails to comply with any
26requirements of the program or the agreement, the eligible
27business may be required to repay any tax incentives the
28authority issued to the eligible business. A required
29repayment of a tax incentive shall be considered a tax payment
30due and payable to the department of revenue by any taxpayer
31that claimed the tax incentive, and the failure to make the
32repayment may be treated by the department of revenue in the
33same manner as a failure to pay the tax shown due, or required
34to be shown due, with the filing of a return or deposit form.
35c. If the eligible business undergoes a layoff or
-8-1permanently closes any of its facilities within the state, the
2eligible business may be subject to all of the following:
3(1) A reduction or elimination of some or all of the tax
4incentives the authority issued to the eligible business.
5(2) Repayment of any tax incentives that the business
6has claimed, and payment of any penalties assessed by the
7department of revenue.
8d. The project completion date, the maintenance period
9completion date, the required number of created jobs, the
10qualifying wage threshold that is applicable to the project,
11the amount of qualifying investment, the maximum aggregate
12value of the tax incentives authorized by the board, and any
13other terms and obligations the authority deems necessary.
14e. The eligible business shall only employ individuals
15legally authorized to work in this state. If the eligible
16business is found to knowingly employ individuals who are
17not legally authorized to work in this state, in addition
18to any penalties provided by law, all or a portion of any
19tax incentives issued by the authority shall be subject to
20recapture by the authority or the department of revenue.
21f. The maximum amount of gross wages, not to exceed three
22percent, that the eligible business may withhold under section
2315.286B, and the time period, not to exceed the term of the
24agreement, during which the specified amount of gross wages may
25be withheld.
26g. Any terms deemed necessary by the authority to effect the
27eligible business’s ongoing compliance with section 15.283.
282. The business shall satisfy all applicable terms of
29the agreement by the project completion date; however, the
30board may for good cause extend the project completion date or
31otherwise amend the terms of the agreement. The board shall
32not amend the terms of the agreement to allow an increase in
33the maximum aggregate value of the tax incentives authorized by
34the board under section 15.284, subsection 3.
353. The eligible business shall comply with all applicable
-9-1terms of the agreement during the maintenance period.
24. The eligible business shall not assign the agreement
3to another entity without the advance written approval of the
4board.
55. The authority may enforce the terms of the agreement as
6necessary and appropriate.
7 Sec. 7. NEW SECTION. 15.286 Sales and use tax refund.
81. An eligible business that has been issued a tax incentive
9certificate under the program shall be entitled to a refund
10of the sales and use taxes paid under chapter 423 for gas,
11electricity, water, and sewer utility services, tangible
12personal property, or on services rendered, furnished, or
13performed to or for a contractor or subcontractor and used in
14the fulfillment of a written contract for the construction or
15equipping of a facility that is part of the eligible business’s
16project. Taxes attributable to intangible property and
17furniture and furnishings shall not be refunded.
182. To receive the sales and use tax refund, the eligible
19business shall file a claim with the department of revenue as
20follows:
21a. The contractor or subcontractor shall state under oath,
22on forms provided by the department of revenue, the amount of
23the sales of tangible personal property or services rendered,
24furnished, or performed including water, sewer, gas, and
25electric utility services upon which sales or use tax has been
26paid prior to contract completion, and shall submit the forms
27to the eligible business before contract completion.
28b. The eligible business shall inform the department of
29revenue in writing of contract completion. The eligible
30business shall, after contract completion, submit an
31application to the department of revenue for a refund of the
32amount of the sales and use taxes paid pursuant to chapter 423
33upon any tangible personal property, or services rendered,
34furnished, or performed, including water, sewer, gas, and
35electric utility services. The application shall be submitted
-10-1in the form and manner prescribed by the department of revenue.
2The department of revenue shall audit the application and,
3if approved, issue a warrant or warrants to the eligible
4business in the amount of the sales or use tax which has been
5paid to the state of Iowa under subsection 1. The eligible
6business’s application must be submitted to the department of
7revenue within one year after the project completion date. An
8application filed by the eligible business in accordance with
9this section shall not be denied by reason of a limitation set
10forth in chapter 421 or 423.
11c. The refund shall be remitted by the department of revenue
12to the eligible business equally over five tax years. Interest
13shall not accrue on any part of the refund that has not yet been
14remitted by the department of revenue to the eligible business.
153. A contractor or subcontractor that willfully makes a
16false report of tax paid under this section is guilty of an
17aggravated misdemeanor, and shall be liable for payment of the
18tax and any applicable penalty and interest.
19 Sec. 8. NEW SECTION. 15.286A Qualifying investment tax
20credit.
211. The authority may authorize a tax credit for an eligible
22business that is up to five percent of the eligible business’s
23qualifying investment in a certified site. The authority shall
24not issue a tax credit certificate to the eligible business
25until the eligible business’s project has been placed in
26service, and at least fifty percent of the created jobs the
27eligible business agreed to in the agreement under section
2815.285, and that pay at least one hundred forty percent of the
29qualifying wage threshold, have been added to the eligible
30business’s payroll. The department of revenue shall remit
31the tax credit to the eligible business equally over five tax
32years. The tax credit shall be allowed against taxes imposed
33under chapter 422, subchapter II, III, or V, and against the
34moneys and credits tax imposed in section 533.329. If the
35eligible business is a partnership, S corporation, limited
-11-1liability company, cooperative organized under chapter 501 and
2filing as a partnership for federal tax purposes, or estate
3or trust electing to have the income taxed directly to the
4individual, an individual may claim the tax credit allowed.
5The amount claimed by the individual shall be based upon the
6pro rata share of the individual’s earnings of the partnership,
7S corporation, limited liability company, cooperative organized
8under chapter 501 and filing as a partnership for federal tax
9purposes, or estate or trust. Any tax credit in excess of
10the eligible business’s tax liability for the tax year may be
11refunded or, at the eligible business’s election, credited to
12the eligible business’s tax liability in any of the following
13five consecutive tax years or until depleted, whichever occurs
14first. The eligible business shall make such election prior to
15the authority issuing a tax credit certificate to the eligible
16business, and the eligible business’s election shall be noted
17on the tax credit certificate. A tax credit shall not be
18carried back to a tax year prior to the tax year in which the
19tax credit is first claimed by the eligible business.
202. If within five years of the date the authority issues
21an eligible business a tax credit under subsection 1, the
22eligible business sells, disposes of, razes, or otherwise
23renders unusable all or a part of the land, buildings, or
24other structures for which the tax credit was claimed under
25this section, the tax liability of the eligible business for
26the year in which all or part of the land, buildings, or other
27existing structures are sold, disposed of, razed, or otherwise
28rendered unusable shall be increased by one of the following
29amounts:
30a. One hundred percent of the tax credit claimed under
31this section if all or a part of the land, buildings, or other
32structures for which the tax credit was claimed under this
33section cease to be eligible for the tax credit within one
34year after the date the authority issued the tax credit to the
35eligible business.
-12- 1b. Eighty percent of the tax credit claimed under this
2section if all or a part of the land, buildings, or other
3structures for which the tax credit was claimed under this
4section cease to be eligible for the tax credit within two
5years after the date the authority issued the tax credit to the
6eligible business.
7c. Sixty percent of the tax credit claimed under this
8section if all or a part of the land, buildings, or other
9structures for which the tax credit was claimed under this
10section cease to be eligible for the tax credit within three
11years after the date the authority issued the tax credit to the
12eligible business.
13d. Forty percent of the tax credit claimed under this
14section if all or a part of the land, buildings, or other
15structures for which the tax credit was claimed under this
16section cease to be eligible for the tax credit within four
17years after the date the authority issued the tax credit to the
18eligible business.
19e. Twenty percent of the tax credit claimed under this
20section if all or a part of the land, buildings, or other
21structures for which the tax credit was claimed under this
22section cease to be eligible for the tax credit within five
23years after the date the authority issued the tax credit to the
24eligible business.
25 Sec. 9. NEW SECTION. 15.286B Withholding tax credit.
261. From the remittance due to the department of revenue
27pursuant to section 422.16, subsection 2, an eligible business
28may withhold an amount, pursuant to section 15.285, subsection
291, paragraph “f”, of the gross wages paid to each employee in a
30created job that pays at least the qualifying wage threshold
31pursuant to the agreement under section 15.285.
322. If the amount withheld under subsection 1 is less than
33three percent of the gross wages paid to each employee in a
34created job that pays at least one hundred forty percent of
35the qualifying wage threshold, the eligible business shall
-13-1receive a credit against the remaining withholding taxes due
2from the eligible business, or the eligible business may carry
3the credit forward up to five consecutive tax years or until
4depleted, whichever is earlier.
53. In any tax year, the aggregate amount of withholding tax
6credit under this section and under any other program for which
7an eligible business is receiving a withholding tax credit
8shall not exceed the amount the eligible business is required
9to deduct and remit to the department of revenue under section
10422.16, subsection 2, for that tax year.
11 Sec. 10. NEW SECTION. 15.287 Foreign businesses —
12acquisition of agricultural land.
131. If a foreign business’s proposed project is located on a
14mega site that includes agricultural land, the requirements of
15section 9I.3, subsection 3, paragraph “f”, must be satisfied in
16order for the foreign business to be eligible for the program.
172. a. A foreign business under subsection 1 that is
18approved by the authority to participate in the program shall
19enter into an agreement with the authority pursuant to section
2015.285. The agreement shall include a provision that requires
21the foreign business to comply with chapter 9I, and specifies
22that failure to do so may result in revocation of all tax
23incentives issued by the authority to the foreign business.
24b. The authority may grant the foreign business one or
25more one-year extensions in which the foreign business must
26comply with section 9I.4. The authority shall not grant
27more than five one-year extensions. The community in which
28the agricultural land is located must approve each one-year
29extension by ordinance or resolution prior to the authority
30granting each extension. The foreign business shall comply
31with the remaining provisions of chapter 9I to the extent the
32provisions do not conflict with this section.
33 Sec. 11. NEW SECTION. 15.288 Other incentives.
341. Except for the high quality jobs program administered
35by the authority pursuant to sections 15.326 through 15.336,
-14-1and the targeted jobs withholding credit pursuant to section
2403.19A, an eligible business may apply for and be eligible to
3receive other federal, state, and local incentives in addition
4to the tax incentives issued by the authority to the eligible
5business under the program.
62. The authority, in its discretion, may prohibit an
7eligible business that has been issued tax incentives under
8the program from receiving any additional tax incentive, tax
9credit, grant, loan, or other financial assistance under any
10program administered by the authority.
11 Sec. 12. NEW SECTION. 15.289 Property tax exemption.
121. A community in which an eligible business’s project
13is located may grant the eligible business a property
14tax exemption for a portion of the actual value added by
15improvements to real property directly related to the eligible
16business’s created jobs. The community may allow a property
17tax exemption for a period not to exceed twenty years beginning
18the year that the improvements to real property are first
19assessed for taxation.
202. For purposes of this section, “improvements” means new
21construction, and rehabilitation of and additions to existing
22structures.
233. A property tax exemption granted under subsection 1 shall
24apply to all taxing districts, except for school districts, in
25which the real property is located.
26 Sec. 13. NEW SECTION. 15.290 Restrictions on board.
27The board shall not authorize tax incentives available under
28the program, or an exemption to restrictions on agricultural
29land holdings pursuant to section 9I.3, subsection 3, paragraph
30“f”, for more than two eligible businesses, or on or after
31January 1, 2026, whichever occurs first.
32EXPLANATION
33The inclusion of this explanation does not constitute agreement with
34the explanation’s substance by the members of the general assembly.
35This bill establishes a major economic growth attraction
-15-1program (program) to be administered by the economic
2development authority (authority).
3To be eligible to receive tax incentives (incentives) under
4the program, a business’s proposed project (project) must be
5located on a certified site greater than 250 acres that the
6authority has determined is suitable for the project, and the
7business’s qualifying investment in the project must exceed $1
8billion. Other requirements for a business to be eligible for
9the program are detailed in the bill. “Qualifying investment”
10is defined in the bill as a capital investment in real property
11located on a certified site, including the purchase price
12of the land, site preparation, infrastructure, and building
13construction for use in the operation of an eligible business.
14“Qualifying investment” also means a capital investment in
15depreciable assets for use in the operation of an eligible
16business. “Certified site” is defined as a site that has been
17issued a certificate of readiness by the authority pursuant to
18Code section 15E.18. “Tax incentives” and “project” are also
19defined in the bill.
20In determining if a business is eligible to participate
21in the program, the authority shall consider a variety of
22factors, including but not limited to whether the jobs created
23by the business’s project are high wage, low turnover, provide
24comprehensive benefits, and expose employees to minimal
25occupational hazards; the impact of the project on businesses
26that compete with the business applying to the program; and
27the project’s economic impact on the state. The bill requires
28the authority to place greater emphasis on businesses that
29have a high proportion of in-state suppliers and few in-state
30competitors; and on projects that diversify the state economy
31and have the potential to create jobs on an ongoing basis.
32Applications for the program shall be submitted in the
33form and manner prescribed by the authority by rule and be
34accompanied by an application fee in an amount determined by
35the authority by rule. In determining a business’s eligibility
-16-1for the program, the authority may engage outside experts
2to complete a technical, financial, or other review of an
3application if such review is outside the expertise of the
4authority. The authority and the authority’s board (board)
5may negotiate with an eligible business regarding the terms
6of, and the aggregate value of, the incentives the eligible
7business may receive under the program. The board may
8authorize any combination of incentives available under the
9program for an eligible business. The board may authorize an
10exemption to restrictions on agricultural land holdings for a
11foreign business that qualifies for the program pursuant to
12the requirements detailed in the bill. “Foreign business” is
13defined in the bill.
14The bill requires an eligible business that is approved to
15participate in the program to enter into an agreement with
16the authority (agreement) that specifies the criteria for the
17successful completion of all requirements of the program.
18The agreement shall contain, at a minimum, the provisions
19as detailed in the bill. The business shall satisfy all
20applicable terms of the agreement by the project completion
21date; however, the board may for good cause extend the project
22completion date or otherwise amend the terms of the agreement.
23The board shall not amend the terms of the agreement to allow
24an increase in the maximum aggregate value of the incentives
25authorized by the board. “Project completion date” is defined
26in the bill. The bill permits the authority to enforce the
27terms of the agreement as necessary and appropriate.
28An eligible business that has been issued a certificate
29under the program shall be entitled to a refund of the sales
30and use taxes (refund) paid under Code chapter 423 for gas,
31electricity, water, and sewer utility services, tangible
32personal property, or on services rendered, furnished, or
33performed to or for a contractor or subcontractor and used
34in the fulfillment of a written contract relating to the
35construction or equipping of a facility that is part of the
-17-1eligible business’s project. Taxes attributable to intangible
2property and furniture and furnishings shall not be refunded.
3The procedure for the business to receive the refund is
4detailed in the bill. The refund shall be remitted by the
5department of revenue (department) to the eligible business
6equally over five tax years. Interest shall not accrue on
7any part of the refund not yet remitted by the department to
8the eligible business. A contractor or subcontractor that
9willfully makes a false report of tax paid is guilty of an
10aggravated misdemeanor, and shall be liable for payment of the
11tax and any applicable penalty and interest. An aggravated
12misdemeanor is punishable by confinement for no more than two
13years and a fine of at least $855 but not more than $8,540.
14The authority may authorize a tax credit for an eligible
15business that is up to 5 percent of the business’s qualifying
16investment in a certified site. The authority shall not
17issue a tax credit certificate until the eligible business’s
18project has been placed in service, and at least 50 percent
19of the created jobs the eligible business agreed to in the
20agreement, and that pay at least 140 percent of the qualifying
21wage threshold, have been added to the eligible business’s
22payroll. “Created job” and “qualifying wage threshold” are
23defined in the bill. The department shall remit the tax credit
24to the eligible business equally over five tax years. The
25tax credit shall be allowed against taxes imposed under Code
26chapter 422, subchapter II, III, or V, and against the moneys
27and credits tax imposed in Code section 533.329. Any tax
28credit in excess of the eligible business’s tax liability for
29the tax year may be refunded or, at the eligible business’s
30election, credited to the eligible business’s tax liability
31in each of the following five consecutive tax years or until
32depleted, whichever occurs first. The eligible business
33shall make such election prior to the authority issuing a
34tax credit certificate to the eligible business, and the
35eligible business’s election shall be noted on the tax credit
-18-1certificate. A tax credit shall not be carried back to a tax
2year prior to the tax year in which the tax credit is first
3claimed by the eligible business. If within five years of the
4date the authority issues an eligible business a qualifying
5investment tax credit the eligible business sells, disposes
6of, razes, or otherwise renders unusable all or a part of the
7land, buildings, or other structures for which the tax credit
8was claimed, the tax liability of the eligible business for
9the year in which all or part of the land, buildings, or other
10existing structures are sold, disposed of, razed, or otherwise
11rendered unusable shall be increased by an amount as detailed
12in the bill.
13From the remittance due to the department pursuant to Code
14section 422.16(2), an eligible business may withhold the
15amount specified in the agreement, not to exceed 3 percent, of
16the gross wages paid to each employee in a created job that
17pays at least the qualifying wage threshold specified in the
18agreement. The withholding may occur for the time period,
19not to exceed the term of the agreement, specified in the
20agreement. If the amount withheld is less than 3 percent of
21the gross wages paid to each employee in a created job, the
22eligible business shall receive a credit against the remaining
23withholding taxes due from the business, or the business may
24carry the credit forward up to five consecutive tax years or
25until depleted, whichever is earlier. In any tax year, the
26aggregate amount of withholding tax credit under this program,
27and any other program for which an eligible business is
28receiving a withholding tax credit, shall not exceed the amount
29the eligible business is required to deduct and remit to the
30department under Code section 422.16(2) for that tax year.
31If a foreign business’s proposed project is located on a
32mega site that includes agricultural land, the requirements as
33detailed in the bill must be satisfied for the foreign business
34to be eligible for the program. “Mega site” is defined in the
35bill as a certified site greater than 1,000 acres. A foreign
-19-1business that is approved by the authority to participate in
2the program shall enter into an agreement with the authority
3that includes a provision that requires the foreign business
4to comply with Code chapter 9I, and specifies that failure to
5do so may result in revocation of incentives issued by the
6authority to the foreign business. The authority may grant the
7foreign business one or more one-year extensions in which the
8foreign business must come into compliance with Code section
99I.4. The authority shall not grant a business more than five
10one-year extensions. The community in which the agricultural
11land is located must approve each extension by ordinance or
12resolution prior to the authority granting each extension.
13Except for the high quality jobs program, and the targeted
14jobs withholding credit, an eligible business may apply
15for and be eligible to receive other federal, state, and
16local incentives in addition to the incentives the authority
17issues to the business under the program. The authority, in
18its discretion, may prohibit an eligible business that has
19been issued incentives under the program from receiving any
20additional tax incentive, tax credit, grant, loan, or other
21financial assistance under any program administered by the
22authority.
23The bill allows a community in which an eligible business’s
24project is located to grant the eligible business a property
25tax exemption (exemption) for a portion of the actual value
26added by improvements to real property directly related
27to the eligible business’s created jobs. The community
28may allow an exemption for a period not to exceed 20 years
29beginning the year that the improvements are first assessed
30for taxation. “Improvements” is defined as new construction,
31and rehabilitation of and additions to existing structures.
32An exemption granted by a community shall apply to all taxing
33districts, except for school districts, in which the real
34property is located.
35The board shall not authorize incentives available under the
-20-1program, or an exemption to restrictions on agricultural land
2holdings pursuant to Code section 9I.3(3)(f), for more than two
3eligible businesses, or on or after January 1, 2026, whichever
4occurs first.
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