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House File 642 - 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. Regularly and frequently making or taking an important
17part in making management decisions substantially contributing
18to or affecting the success of a farm’s operations.
192. “Base employment level” means the number of full-time
20equivalent positions at a business, as established by the
21authority and the business using the business’s payroll
22records, as of the date the business applies for tax incentives
23under the program.
243. “Benefit” means nonwage compensation provided to an
25employee. “Benefits” include medical and dental insurance, a
26pension, a retirement plan, a profit-sharing plan, child care,
27life insurance, vision insurance, and disability insurance.
284. “Certified site” means a site that has been issued a
29certificate of readiness by the authority pursuant to section
3015E.18.
315. “Community” means a city, county, or entity established
32pursuant to chapter 28E.
336. “Contract completion” means the date of completion of
34the terms of a contract between a contractor and an eligible
35business.
-2- 17. “Contractor” means a person that has executed a contract
2with an eligible business for the provision of property,
3materials, or services for the construction or equipping of a
4facility that is part of the eligible business’s project.
58. “Created jobs” or “create jobs” means new, permanent,
6full-time equivalent positions added to an eligible business’s
7payroll in excess of the eligible business’s base employment
8level.
99. “Data center business” means the same as defined in
10section 423.3, subsection 95.
1110. “Eligible business” means a business that meets the
12requirements of section 15.283.
1311. “Foreign business” means the same as defined in section
149I.1.
1512. “Full-time equivalent position” means a non-part-time
16position for the number of hours or days per week considered
17to be full-time work for the kind of service or work performed
18for an employer. Typically, a “full-time equivalent position”
19requires two thousand eighty hours of work in a calendar year,
20including all paid holidays, vacations, sick time, and other
21paid leave.
2213. “Maintenance period” means the period of time between
23the project completion date and the maintenance period
24completion date during which an eligible business must maintain
25all created jobs per the agreement under section 15.285.
2614. “Maintenance period completion date” means the date on
27which the maintenance period ends.
2815. “Mega site” means a certified site greater than one
29thousand acres.
3016. “Program” means the major economic growth attraction
31program.
3217. “Project” means an activity or set of activities
33directly related to the start-up or location of an eligible
34business, proposed in an eligible business’s application to the
35program, that will accomplish the goals of the program.
-3- 118. “Project completion date” means the date by which an
2eligible business that has been approved by the authority to
3participate in the program agrees to complete the terms and
4conditions of the agreement under section 15.285.
519. “Project completion period” means the period of time
6between the date the authority approves an eligible business to
7participate in the program and the project completion date.
820. “Qualifying investment” means a capital investment
9in real property located on a certified site, including the
10purchase price of the land, site preparation, infrastructure,
11and building construction. “Qualifying investment” also means a
12capital investment in depreciable assets.
1321. “Qualifying wage threshold” means the wage level
14represented by the wages within two standard deviations of
15the mean wage within the laborshed area in which the eligible
16business is located, as calculated by the authority by rule,
17using the most current covered wage and employment data
18available from the department of workforce development for the
19laborshed area in which the eligible business is located.
2022. “Subcontractor” means a person that contracts with
21a contractor for the provision of property, materials, or
22services for the construction or equipping of a facility that
23is part of an eligible business’s project.
2423. “Tax incentives” means tax credits, tax refunds, or tax
25exemptions authorized under the program by the authority for an
26eligible business.
27 Sec. 4. NEW SECTION. 15.283 Eligible business.
281. To be eligible to receive tax incentives under
29the program, a business must meet all of the following
30requirements:
31a. The business’s proposed project must be located on a
32certified site greater than two hundred fifty acres that the
33authority has determined is suitable for the project.
34b. The business’s qualifying investment in the proposed
35project must exceed one billion dollars.
-4- 1c. The community in which the proposed project is located
2must approve the project either by ordinance or resolution.
3d. (1) The business must be primarily engaged in advanced
4manufacturing, biosciences, or research and development.
5The business shall not be a data center business, a retail
6business, or a business where a cover charge or membership
7requirement restricts certain individuals from entering the
8business.
9(2) Factors the authority shall consider to determine if
10a business is primarily engaged in advanced manufacturing,
11biosciences, or research and development shall include but are
12not limited to all of the following:
13(a) The business’s North American industry classification
14system code.
15(b) The business’s main sources of revenue.
16(c) The business’s customer base.
17e. (1) The business must not be solely relocating
18operations from one area of the state to another area of
19the state. A proposed project that does not create jobs or
20involve a substantial amount of new capital investment shall
21be presumed to be a relocation of operations. For purposes of
22this subparagraph, the authority shall consider a letter from
23the affected local community’s government officials supporting
24the business’s move away from the affected local community
25in making a determination whether the business is solely
26relocating operations.
27(2) This paragraph shall not be construed to prohibit
28a business from expanding the business’s operations in a
29community if the business has similar operations in this state
30that are not closing or undergoing a substantial reduction in
31operations.
32f. The business must create jobs as part of the business’s
33proposed project. The business must demonstrate that the
34created jobs will pay at least one hundred forty percent of the
35qualifying wage threshold by the project completion date, and
-5-1through the maintenance period completion date.
2g. The business must provide comprehensive benefits to
3each employee employed in a created job. The authority may
4adopt rules under chapter 17A to determine the requirements for
5comprehensive benefits.
6h. (1) The business must not have a record of violations
7of the law or of regulations, including but not limited to
8antitrust, environmental, trade, or worker safety, that over
9a period of time show a consistent pattern or that establish
10the business’s intentional, criminal, or reckless conduct in
11violation of such laws or regulations.
12(2) If the authority determines that the business has a
13record of violations described in subparagraph (1), and the
14authority finds that the violations did not seriously affect
15public health, public safety, or the environment, the business
16may be eligible to qualify for tax incentives under the
17program.
18(3) If the authority determines that the business has
19a record of violations described in subparagraph (1), and
20the authority finds that there were mitigating circumstances
21related to the violations, the business may be eligible to
22qualify for tax incentives under the program.
23(4) In making determinations and findings under
24subparagraphs (2) and (3), and making a determination whether a
25business is disqualified from the program, the authority shall
26be exempt from chapter 17A.
272. a. In determining if a business is eligible to
28participate in the program, the authority shall consider a
29variety of factors, including but not limited to all of the
30following:
31(1) The quality of the business’s proposed project’s
32created jobs. The authority shall place greater emphasis on
33created jobs that are high wage, low turnover, that provide
34comprehensive benefits, and that expose employees to minimal
35occupational hazards. A business that pays wages substantially
-6-1below that of similar businesses located in the same geographic
2area shall not be given priority under the program.
3(2) The impact of the business’s proposed project on
4businesses that are in competition with the business.
5The authority shall make a good-faith effort to identify
6existing Iowa businesses in competition with the business
7being considered for the program. The authority shall make
8a good-faith effort to determine the probability that any
9proposed tax incentives will displace employees of the
10competing businesses. In determining the impact on the
11competing businesses, created jobs resulting from employees
12being displaced from the competing businesses shall not be
13counted as created jobs for the applying business’s project.
14(3) The business’s proposed project’s economic impact
15on the state. The authority shall place greater emphasis
16on businesses and proposed projects that meet the following
17requirements:
18(a) The business has a high proportion of in-state
19suppliers.
20(b) The proposed project will diversify the state economy.
21(c) The business has few in-state competitors.
22(d) The proposed project has the potential to create jobs on
23an ongoing basis.
24(e) Any other factors the authority deems relevant in
25determining the economic impact of a proposed project.
26 Sec. 5. NEW SECTION. 15.284 Applications — authorization
27of tax credits and exemptions.
281. Applications for the program shall be submitted to the
29authority in the form and manner prescribed by the authority by
30rule. Each application must be accompanied by an application
31fee in an amount determined by the authority by rule.
322. In determining the eligibility of a business to
33participate in the program, the authority may engage outside
34experts to complete a technical, financial, or other review
35of an application submitted by a business if such review is
-7-1outside the expertise of the authority.
23. a. The authority and the board may negotiate with an
3eligible business regarding the terms of, and the aggregate
4value of, the tax incentives the eligible business may receive
5under the program.
6b. The board may authorize any combination of tax incentives
7available under the program for an eligible business.
84. The board may authorize an exemption to restrictions on
9agricultural land holdings pursuant to section 9I.3, subsection
103, paragraph “f”.
11 Sec. 6. NEW SECTION. 15.285 Agreement.
121. An eligible business that is approved by the authority to
13participate in the program shall enter into an agreement with
14the authority that specifies the criteria for the successful
15completion of all requirements of the program. The agreement
16must contain, at a minimum, provisions related to all of the
17following:
18a. The eligible business must certify to the authority
19annually that the business is in compliance with the agreement.
20b. If the eligible business fails to comply with any
21requirements of the program or the agreement, the eligible
22business may be required to repay any tax incentives the
23authority issued to the eligible business. A required
24repayment of a tax incentive shall be considered a tax payment
25due and payable to the department of revenue by any taxpayer
26that claimed the tax incentive, and the failure to make the
27repayment may be treated by the department of revenue in the
28same manner as a failure to pay the tax shown due, or required
29to be shown due, with the filing of a return or deposit form.
30c. If the eligible business undergoes a layoff or
31permanently closes any of its facilities within the state, the
32eligible business may be subject to all of the following:
33(1) A reduction or elimination of some or all of the tax
34incentives the authority issued to the eligible business.
35(2) Repayment of any tax incentives that the business
-8-1has claimed, and payment of any penalties assessed by the
2department of revenue.
3d. The project completion date, the maintenance period
4completion date, the required number of created jobs, the
5qualifying wage threshold that is applicable to the project,
6the amount of qualifying investment, the maximum aggregate
7value of the tax incentives authorized by the board, and any
8other terms and obligations the authority deems necessary.
9e. The eligible business shall only employ individuals
10legally authorized to work in this state. If the eligible
11business is found to knowingly employ individuals who are
12not legally authorized to work in this state, in addition
13to any penalties provided by law, all or a portion of any
14tax incentives issued by the authority shall be subject to
15recapture by the authority or the department of revenue.
16f. Any terms deemed necessary by the authority to effect the
17eligible business’s ongoing compliance with section 15.283.
182. The business shall satisfy all applicable terms of
19the agreement by the project completion date; however, the
20board may for good cause extend the project completion date or
21otherwise amend the terms of the agreement. The board shall
22not amend the terms of the agreement to allow an increase in
23the maximum aggregate value of the tax incentives authorized by
24the board under section 15.284, subsection 3.
253. The eligible business shall not assign the agreement
26to another entity without the advance written approval of the
27board.
284. The authority may enforce the terms of the agreement as
29necessary and appropriate.
30 Sec. 7. NEW SECTION. 15.286 Sales and use tax refund.
311. An eligible business that has been issued a tax incentive
32certificate under the program shall be entitled to a refund
33of the sales and use taxes paid under chapter 423 for gas,
34electricity, water, and sewer utility services, tangible
35personal property, or on services rendered, furnished, or
-9-1performed to or for a contractor or subcontractor and used
2in the fulfillment of the contract for the construction or
3equipping of a facility that is part of the eligible business’s
4project. Taxes attributable to intangible property and
5furniture and furnishings shall not be refunded.
62. To receive the sales and use tax refund, the eligible
7business shall file a claim with the department of revenue as
8follows:
9a. The contractor or subcontractor shall state under oath,
10on forms provided by the department of revenue, the amount of
11the sales of tangible personal property or services rendered,
12furnished, or performed including water, sewer, gas, and
13electric utility services upon which sales or use tax has been
14paid prior to contract completion, and shall submit the forms
15to the eligible business before contract completion.
16b. The eligible business shall inform the department of
17revenue in writing of contract completion. The eligible
18business shall, after contract completion, submit an
19application to the department of revenue for a refund of the
20amount of the sales and use taxes paid pursuant to chapter 423
21upon any tangible personal property, or services rendered,
22furnished, or performed, including water, sewer, gas, and
23electric utility services. The application shall be submitted
24in the form and manner prescribed by the department of revenue.
25The department of revenue shall audit the application and,
26if approved, issue a warrant to the eligible business in the
27amount of the sales or use tax which has been paid to the
28state of Iowa under subsection 1. The eligible business’s
29application must be submitted to the department of revenue
30within one year after the project completion date. An
31application filed by the eligible business in accordance with
32this section shall not be denied by reason of a limitation set
33forth in chapter 421 or 423.
34c. The refund shall be remitted by the department of revenue
35to the eligible business equally over five tax years.
-10- 13. A contractor or subcontractor that willfully makes a
2false report of tax paid under this section is guilty of an
3aggravated misdemeanor, and shall be liable for payment of the
4tax and any applicable penalty and interest.
5 Sec. 8. NEW SECTION. 15.286A Qualifying investment tax
6credit.
71. The authority may authorize a tax credit for an eligible
8business that is up to five percent of the eligible business’s
9qualifying investment in a certified site. The eligible
10business shall not claim the tax credit until the eligible
11business’s project has been placed in service, and at least
12fifty percent of the created jobs the eligible business
13agreed to in the agreement under section 15.285, and that
14pay at least one hundred forty percent of the qualifying
15wage threshold, have been added to the eligible business’s
16payroll. The department of revenue shall remit the tax credit
17to the eligible business equally over five tax years. The tax
18credit shall be allowed against taxes imposed under chapter
19422, subchapter II, III, or V, and against the moneys and
20credits tax imposed in section 533.329. If the eligible
21business is a partnership, S corporation, limited liability
22company, cooperative organized under chapter 501 and filing
23as a partnership for federal tax purposes, or estate or trust
24electing to have the income taxed directly to the individual,
25an individual may claim the tax credit allowed. The amount
26claimed by the individual shall be based upon the pro rata
27share of the individual’s earnings of the partnership, S
28corporation, limited liability company, cooperative organized
29under chapter 501 and filing as a partnership for federal tax
30purposes, or estate or trust. Any tax credit in excess of
31the eligible business’s tax liability for the tax year may be
32refunded or, at the eligible business’s election, credited to
33the eligible business’s tax liability in any of the following
34five consecutive tax years or until depleted, whichever occurs
35first. A tax credit shall not be carried back to a tax year
-11-1prior to the tax year in which the tax credit is first claimed
2by the eligible business.
32. If within five years of the date the authority issues
4an eligible business a tax credit under subsection 1, the
5eligible business sells, disposes of, razes, or otherwise
6renders unusable all or a part of the land, buildings, or
7other structures for which the tax credit was claimed under
8this section, 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 one of the following
12amounts:
13a. One hundred percent of the tax credit claimed under
14this section 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 one
17year after the date the authority issued the tax credit to the
18eligible business.
19b. Eighty 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 two
23years after the date the authority issued the tax credit to the
24eligible business.
25c. Sixty percent of the tax credit claimed under this
26section if all or a part of the land, buildings, or other
27structures for which the tax credit was claimed under this
28section cease to be eligible for the tax credit within three
29years after the date the authority issued the tax credit to the
30eligible business.
31d. Forty percent of the tax credit claimed under this
32section if all or a part of the land, buildings, or other
33structures for which the tax credit was claimed under this
34section cease to be eligible for the tax credit within four
35years after the date the authority issued the tax credit to the
-12-1eligible business.
2e. Twenty percent of the tax credit claimed under this
3section if all or a part of the land, buildings, or other
4structures for which the tax credit was claimed under this
5section cease to be eligible for the tax credit within five
6years after the date the authority issued the tax credit to the
7eligible business.
8 Sec. 9. NEW SECTION. 15.286B Withholding tax credit.
91. From the remittance due to the department of revenue
10pursuant to section 422.16, subsection 2, an eligible business
11may withhold an amount not to exceed three percent of the gross
12wages paid to each employee in a created job that pays at least
13the qualifying wage threshold pursuant to the agreement under
14section 15.285.
152. If the amount withheld under subsection 1 is less than
16three percent of the gross wages paid to each employee in a
17created job that pays at least one hundred forty percent of
18the qualifying wage threshold, the eligible business shall
19receive a credit against the remaining withholding taxes due
20from the eligible business, or the eligible business may carry
21the credit forward up to five consecutive tax years or until
22depleted, whichever is earlier.
233. In any tax year, the aggregate amount of withholding tax
24credit under this section and under any other program for which
25an eligible business is receiving a withholding tax credit
26shall not exceed the amount the eligible business is required
27to deduct and remit to the department of revenue under section
28422.16, subsection 2, for that tax year.
29 Sec. 10. NEW SECTION. 15.287 Foreign businesses —
30acquisition of agricultural land.
311. If a foreign business’s proposed project is located on a
32mega site that includes agricultural land, the requirements of
33section 9I.3, subsection 3, paragraph “f”, must be satisfied in
34order for the foreign business to be eligible for the program.
352. a. A foreign business under subsection 1 that is
-13-1approved by the authority to participate in the program shall
2enter into an agreement with the authority pursuant to section
315.285. The agreement shall include a provision that requires
4the foreign business to comply with chapter 9I, and specifies
5that failure to do so may result in revocation of all tax
6incentives issued by the authority to the foreign business.
7b. The authority may grant the foreign business one or
8more one-year extensions in which the foreign business must
9comply with section 9I.4. The authority shall not grant
10more than five one-year extensions. The community in which
11the agricultural land is located must approve each one-year
12extension by ordinance or resolution prior to the authority
13granting each extension. The foreign business shall comply
14with the remaining provisions of chapter 9I to the extent the
15provisions do not conflict with this section.
16 Sec. 11. NEW SECTION. 15.288 Other incentives.
171. Except for the high quality jobs program administered
18by the authority pursuant to sections 15.326 through 15.336,
19and the targeted jobs withholding credit pursuant to section
20403.19A, an eligible business may apply for and be eligible to
21receive other federal, state, and local incentives in addition
22to the tax incentives issued by the authority to the eligible
23business under the program.
242. The authority, in its discretion, may prohibit an
25eligible business that has been issued tax incentives under
26the program from receiving any additional tax incentive, tax
27credit, grant, loan, or other financial assistance under any
28program administered by the authority.
29 Sec. 12. NEW SECTION. 15.289 Property tax exemption.
301. A community in which an eligible business’s project
31is located may grant the eligible business a property tax
32exemption for all of, or a portion of, the actual value added
33by improvements to real property directly related to the
34eligible business’s created jobs. The community may allow a
35property tax exemption for a period not to exceed twenty years
-14-1beginning the year that the improvements to real property are
2first assessed for taxation.
32. For purposes of this section, “improvements” means new
4construction, and rehabilitation of and additions to existing
5structures.
63. A property tax exemption granted under subsection 1 shall
7apply to all taxing districts, except for school districts, in
8which the real property is located.
9EXPLANATION
10The inclusion of this explanation does not constitute agreement with
11the explanation’s substance by the members of the general assembly.
12This bill establishes a major economic growth attraction
13program (program) to be administered by the economic
14development authority (authority).
15To be eligible to receive tax incentives (incentives) under
16the program, a business’s proposed project (project) must
17be located on a certified site greater than 250 acres that
18the authority has determined is suitable for the project,
19and the business’s qualifying investment in the project must
20exceed $1 billion. Other requirements for a business to be
21eligible for the program are detailed in the bill. “Qualifying
22investment” is defined in the bill as a capital investment
23in real property located on a certified site, including the
24purchase price of the land, site preparation, infrastructure,
25and building construction. “Qualifying investment” also means
26a capital investment in depreciable assets. “Certified site”
27is defined as a site that has been issued a certificate of
28readiness by the authority pursuant to Code section 15E.18.
29“Tax incentives” and “project” are also defined in the bill.
30In determining if a business is eligible to participate
31in the program, the authority shall consider a variety of
32factors, including but not limited to whether the jobs created
33by the business’s project are high wage, low turnover, provide
34comprehensive benefits, and expose employees to minimal
35occupational hazards; the impact of the project on businesses
-15-1that compete with the business applying to the program; and
2the project’s economic impact on the state. The bill requires
3the authority to place greater emphasis on businesses that
4have a high proportion of in-state suppliers and few in-state
5competitors; and on projects that diversify the state economy
6and have the potential to create jobs on an ongoing basis.
7Applications for the program shall be submitted in the
8form and manner prescribed by the authority by rule and be
9accompanied by an application fee in an amount determined by
10the authority by rule. In determining a business’s eligibility
11for the program, the authority may engage outside experts
12to complete a technical, financial, or other review of an
13application if such review is outside the expertise of the
14authority. The authority and the authority’s board (board)
15may negotiate with an eligible business regarding the terms
16of, and the aggregate value of, the incentives the eligible
17business may receive under the program. The board may
18authorize any combination of incentives available under the
19program for an eligible business. The board may authorize an
20exemption to restrictions on agricultural land holdings for a
21foreign business that qualifies for the program pursuant to
22the requirements detailed in the bill. “Foreign business” is
23defined in the bill.
24The bill requires an eligible business that is approved to
25participate in the program to enter into an agreement with
26the authority that specifies the criteria for the successful
27completion of all requirements of the program. The agreement
28shall contain, at a minimum, the provisions as detailed in
29the bill. The business shall satisfy all applicable terms of
30the agreement by the project completion date; however, the
31board may for good cause extend the project completion date or
32otherwise amend the terms of the agreement. The board shall
33not amend the agreement to allow an increase in the maximum
34aggregate value of the incentives originally authorized by
35the board. “Project completion date” is defined in the bill.
-16-1The bill permits the authority to enforce the terms of the
2agreement as necessary and appropriate.
3An eligible business that has been issued a certificate
4under the program shall be entitled to a refund of the sales
5and use taxes (refund) paid under Code chapter 423 for gas,
6electricity, water, and sewer utility services, tangible
7personal property, or on services rendered, furnished, or
8performed to or for a contractor or subcontractor and used in
9the fulfillment of the contract relating to the construction or
10equipping of a facility that is part of the eligible business’s
11project. Taxes attributable to intangible property and
12furniture and furnishings shall not be refunded. The procedure
13for the business to receive the refund is detailed in the
14bill. The refund shall be remitted by the department to the
15eligible business equally over five tax years. A contractor or
16subcontractor that willfully makes a false report of tax paid
17is guilty of an aggravated misdemeanor, and shall be liable for
18payment of the tax and any applicable penalty and interest. An
19aggravated misdemeanor is punishable by confinement for no more
20than two years and a fine of at least $855 but not more than
21$8,540.
22The authority may authorize a tax credit for an eligible
23business that is up to 5 percent of the business’s qualifying
24investment in a certified site. The eligible business
25shall not claim the tax credit until the eligible business’s
26project has been placed in service, and at least 50 percent
27of the created jobs the eligible business agreed to in the
28agreement, and that pay at least 140 percent of the qualifying
29wage threshold, have been added to the eligible business’s
30payroll. The department shall remit the tax credit to the
31eligible business equally over five tax years. The tax credit
32shall be allowed against taxes imposed under Code chapter
33422, subchapter II, III, or V, and against the moneys and
34credits tax imposed in Code section 533.329. Any tax credit
35in excess of the eligible business’s tax liability for the tax
-17-1year may be refunded or, at the eligible business’s election,
2credited to the eligible business’s tax liability in each of
3the following five consecutive tax years or until depleted,
4whichever occurs first. A tax credit shall not be carried back
5to a tax year prior to the tax year in which the tax credit
6is first claimed by the eligible business. If within five
7years of the date the authority issues an eligible business a
8qualifying investment tax credit the eligible business sells,
9disposes of, razes, or otherwise renders unusable all or a part
10of the land, buildings, or other structures for which the tax
11credit was claimed, the tax liability of the eligible business
12for the year in which all or part of the land, buildings, or
13other existing structures are sold, disposed of, razed, or
14otherwise rendered unusable shall be increased by an amount as
15detailed in the bill.
16From the remittance due to the department of revenue
17pursuant to Code section 422.16(2), an eligible business may
18withhold an amount not to exceed 3 percent of the gross wages
19paid to each employee in a created job that pays at least
20the qualifying wage threshold specified in the agreement the
21business entered into with the authority. “Created job” and
22“qualifying wage threshold” are defined in the bill. If the
23amount withheld is less than 3 percent of the gross wages
24paid to each employee in a created job that pays at least 140
25percent of the qualifying wage threshold, the eligible business
26shall receive a credit against the remaining withholding
27taxes due from the business, or the business may carry the
28credit forward up to five consecutive tax years or until
29depleted, whichever is earlier. In any tax year, the aggregate
30amount of withholding tax credit under this program, and any
31other program for which an eligible business is receiving
32a withholding tax credit, shall not exceed the amount the
33eligible business is required to deduct and remit to the
34department of revenue under Code section 422.16(2) for that tax
35year.
-18- 1If a foreign business’s proposed project is located on a
2mega site that includes agricultural land, the requirements as
3detailed in the bill must be satisfied for the foreign business
4to be eligible for the program. “Mega site” is defined in the
5bill as a certified site greater than 1,000 acres. A foreign
6business that is approved by the authority to participate in
7the program shall enter into an agreement with the authority
8that includes a provision that requires the foreign business
9to comply with Code chapter 9I, and specifies that failure to
10do so may result in revocation of incentives issued by the
11authority to the foreign business. The authority may grant the
12foreign business one or more one-year extensions in which the
13foreign business must come into compliance with Code section
149I.4. The authority shall not grant a business more than five
15one-year extensions. The community in which the agricultural
16land is located must approve each extension by ordinance or
17resolution prior to the authority granting each extension.
18Except for the high quality jobs program, and the targeted
19jobs withholding credit, an eligible business may apply
20for and be eligible to receive other federal, state, and
21local incentives in addition to the incentives the authority
22issues to the business under the program. The authority, in
23its discretion, may prohibit an eligible business that has
24been issued incentives under the program from receiving any
25additional tax incentive, tax credit, grant, loan, or other
26financial assistance under any program administered by the
27authority.
28The bill allows a community in which an eligible business’s
29project is located to grant the eligible business a property
30tax exemption (exemption) for all of, or a portion of, the
31actual value added by improvements to real property directly
32related to the eligible business’s created jobs. The community
33may allow an exemption for a period not to exceed 20 years
34beginning the year that the improvements are first assessed
35for taxation. “Improvements” is defined as new construction,
-19-1and rehabilitation of and additions to existing structures.
2An exemption granted by a community shall apply to all taxing
3districts, except for school districts, in which the real
4property is located.
-20-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. Regularly and frequently making or taking an important
17part in making management decisions substantially contributing
18to or affecting the success of a farm’s operations.
192. “Base employment level” means the number of full-time
20equivalent positions at a business, as established by the
21authority and the business using the business’s payroll
22records, as of the date the business applies for tax incentives
23under the program.
243. “Benefit” means nonwage compensation provided to an
25employee. “Benefits” include medical and dental insurance, a
26pension, a retirement plan, a profit-sharing plan, child care,
27life insurance, vision insurance, and disability insurance.
284. “Certified site” means a site that has been issued a
29certificate of readiness by the authority pursuant to section
3015E.18.
315. “Community” means a city, county, or entity established
32pursuant to chapter 28E.
336. “Contract completion” means the date of completion of
34the terms of a contract between a contractor and an eligible
35business.
-2- 17. “Contractor” means a person that has executed a contract
2with an eligible business for the provision of property,
3materials, or services for the construction or equipping of a
4facility that is part of the eligible business’s project.
58. “Created jobs” or “create jobs” means new, permanent,
6full-time equivalent positions added to an eligible business’s
7payroll in excess of the eligible business’s base employment
8level.
99. “Data center business” means the same as defined in
10section 423.3, subsection 95.
1110. “Eligible business” means a business that meets the
12requirements of section 15.283.
1311. “Foreign business” means the same as defined in section
149I.1.
1512. “Full-time equivalent position” means a non-part-time
16position for the number of hours or days per week considered
17to be full-time work for the kind of service or work performed
18for an employer. Typically, a “full-time equivalent position”
19requires two thousand eighty hours of work in a calendar year,
20including all paid holidays, vacations, sick time, and other
21paid leave.
2213. “Maintenance period” means the period of time between
23the project completion date and the maintenance period
24completion date during which an eligible business must maintain
25all created jobs per the agreement under section 15.285.
2614. “Maintenance period completion date” means the date on
27which the maintenance period ends.
2815. “Mega site” means a certified site greater than one
29thousand acres.
3016. “Program” means the major economic growth attraction
31program.
3217. “Project” means an activity or set of activities
33directly related to the start-up or location of an eligible
34business, proposed in an eligible business’s application to the
35program, that will accomplish the goals of the program.
-3- 118. “Project completion date” means the date by which an
2eligible business that has been approved by the authority to
3participate in the program agrees to complete the terms and
4conditions of the agreement under section 15.285.
519. “Project completion period” means the period of time
6between the date the authority approves an eligible business to
7participate in the program and the project completion date.
820. “Qualifying investment” means a capital investment
9in real property located on a certified site, including the
10purchase price of the land, site preparation, infrastructure,
11and building construction. “Qualifying investment” also means a
12capital investment in depreciable assets.
1321. “Qualifying wage threshold” means the wage level
14represented by the wages within two standard deviations of
15the mean wage within the laborshed area in which the eligible
16business is located, as calculated by the authority by rule,
17using the most current covered wage and employment data
18available from the department of workforce development for the
19laborshed area in which the eligible business is located.
2022. “Subcontractor” means a person that contracts with
21a contractor for the provision of property, materials, or
22services for the construction or equipping of a facility that
23is part of an eligible business’s project.
2423. “Tax incentives” means tax credits, tax refunds, or tax
25exemptions authorized under the program by the authority for an
26eligible business.
27 Sec. 4. NEW SECTION. 15.283 Eligible business.
281. To be eligible to receive tax incentives under
29the program, a business must meet all of the following
30requirements:
31a. The business’s proposed project must be located on a
32certified site greater than two hundred fifty acres that the
33authority has determined is suitable for the project.
34b. The business’s qualifying investment in the proposed
35project must exceed one billion dollars.
-4- 1c. The community in which the proposed project is located
2must approve the project either by ordinance or resolution.
3d. (1) The business must be primarily engaged in advanced
4manufacturing, biosciences, or research and development.
5The business shall not be a data center business, a retail
6business, or a business where a cover charge or membership
7requirement restricts certain individuals from entering the
8business.
9(2) Factors the authority shall consider to determine if
10a business is primarily engaged in advanced manufacturing,
11biosciences, or research and development shall include but are
12not limited to all of the following:
13(a) The business’s North American industry classification
14system code.
15(b) The business’s main sources of revenue.
16(c) The business’s customer base.
17e. (1) The business must not be solely relocating
18operations from one area of the state to another area of
19the state. A proposed project that does not create jobs or
20involve a substantial amount of new capital investment shall
21be presumed to be a relocation of operations. For purposes of
22this subparagraph, the authority shall consider a letter from
23the affected local community’s government officials supporting
24the business’s move away from the affected local community
25in making a determination whether the business is solely
26relocating operations.
27(2) This paragraph shall not be construed to prohibit
28a business from expanding the business’s operations in a
29community if the business has similar operations in this state
30that are not closing or undergoing a substantial reduction in
31operations.
32f. The business must create jobs as part of the business’s
33proposed project. The business must demonstrate that the
34created jobs will pay at least one hundred forty percent of the
35qualifying wage threshold by the project completion date, and
-5-1through the maintenance period completion date.
2g. The business must provide comprehensive benefits to
3each employee employed in a created job. The authority may
4adopt rules under chapter 17A to determine the requirements for
5comprehensive benefits.
6h. (1) The business must not have a record of violations
7of the law or of regulations, including but not limited to
8antitrust, environmental, trade, or worker safety, that over
9a period of time show a consistent pattern or that establish
10the business’s intentional, criminal, or reckless conduct in
11violation of such laws or regulations.
12(2) If the authority determines that the business has a
13record of violations described in subparagraph (1), and the
14authority finds that the violations did not seriously affect
15public health, public safety, or the environment, the business
16may be eligible to qualify for tax incentives under the
17program.
18(3) If the authority determines that the business has
19a record of violations described in subparagraph (1), and
20the authority finds that there were mitigating circumstances
21related to the violations, the business may be eligible to
22qualify for tax incentives under the program.
23(4) In making determinations and findings under
24subparagraphs (2) and (3), and making a determination whether a
25business is disqualified from the program, the authority shall
26be exempt from chapter 17A.
272. a. In determining if a business is eligible to
28participate in the program, the authority shall consider a
29variety of factors, including but not limited to all of the
30following:
31(1) The quality of the business’s proposed project’s
32created jobs. The authority shall place greater emphasis on
33created jobs that are high wage, low turnover, that provide
34comprehensive benefits, and that expose employees to minimal
35occupational hazards. A business that pays wages substantially
-6-1below that of similar businesses located in the same geographic
2area shall not be given priority under the program.
3(2) The impact of the business’s proposed project on
4businesses that are in competition with the business.
5The authority shall make a good-faith effort to identify
6existing Iowa businesses in competition with the business
7being considered for the program. The authority shall make
8a good-faith effort to determine the probability that any
9proposed tax incentives will displace employees of the
10competing businesses. In determining the impact on the
11competing businesses, created jobs resulting from employees
12being displaced from the competing businesses shall not be
13counted as created jobs for the applying business’s project.
14(3) The business’s proposed project’s economic impact
15on the state. The authority shall place greater emphasis
16on businesses and proposed projects that meet the following
17requirements:
18(a) The business has a high proportion of in-state
19suppliers.
20(b) The proposed project will diversify the state economy.
21(c) The business has few in-state competitors.
22(d) The proposed project has the potential to create jobs on
23an ongoing basis.
24(e) Any other factors the authority deems relevant in
25determining the economic impact of a proposed project.
26 Sec. 5. NEW SECTION. 15.284 Applications — authorization
27of tax credits and exemptions.
281. Applications for the program shall be submitted to the
29authority in the form and manner prescribed by the authority by
30rule. Each application must be accompanied by an application
31fee in an amount determined by the authority by rule.
322. In determining the eligibility of a business to
33participate in the program, the authority may engage outside
34experts to complete a technical, financial, or other review
35of an application submitted by a business if such review is
-7-1outside the expertise of the authority.
23. a. The authority and the board may negotiate with an
3eligible business regarding the terms of, and the aggregate
4value of, the tax incentives the eligible business may receive
5under the program.
6b. The board may authorize any combination of tax incentives
7available under the program for an eligible business.
84. The board may authorize an exemption to restrictions on
9agricultural land holdings pursuant to section 9I.3, subsection
103, paragraph “f”.
11 Sec. 6. NEW SECTION. 15.285 Agreement.
121. An eligible business that is approved by the authority to
13participate in the program shall enter into an agreement with
14the authority that specifies the criteria for the successful
15completion of all requirements of the program. The agreement
16must contain, at a minimum, provisions related to all of the
17following:
18a. The eligible business must certify to the authority
19annually that the business is in compliance with the agreement.
20b. If the eligible business fails to comply with any
21requirements of the program or the agreement, the eligible
22business may be required to repay any tax incentives the
23authority issued to the eligible business. A required
24repayment of a tax incentive shall be considered a tax payment
25due and payable to the department of revenue by any taxpayer
26that claimed the tax incentive, and the failure to make the
27repayment may be treated by the department of revenue in the
28same manner as a failure to pay the tax shown due, or required
29to be shown due, with the filing of a return or deposit form.
30c. If the eligible business undergoes a layoff or
31permanently closes any of its facilities within the state, the
32eligible business may be subject to all of the following:
33(1) A reduction or elimination of some or all of the tax
34incentives the authority issued to the eligible business.
35(2) Repayment of any tax incentives that the business
-8-1has claimed, and payment of any penalties assessed by the
2department of revenue.
3d. The project completion date, the maintenance period
4completion date, the required number of created jobs, the
5qualifying wage threshold that is applicable to the project,
6the amount of qualifying investment, the maximum aggregate
7value of the tax incentives authorized by the board, and any
8other terms and obligations the authority deems necessary.
9e. The eligible business shall only employ individuals
10legally authorized to work in this state. If the eligible
11business is found to knowingly employ individuals who are
12not legally authorized to work in this state, in addition
13to any penalties provided by law, all or a portion of any
14tax incentives issued by the authority shall be subject to
15recapture by the authority or the department of revenue.
16f. Any terms deemed necessary by the authority to effect the
17eligible business’s ongoing compliance with section 15.283.
182. The business shall satisfy all applicable terms of
19the agreement by the project completion date; however, the
20board may for good cause extend the project completion date or
21otherwise amend the terms of the agreement. The board shall
22not amend the terms of the agreement to allow an increase in
23the maximum aggregate value of the tax incentives authorized by
24the board under section 15.284, subsection 3.
253. The eligible business shall not assign the agreement
26to another entity without the advance written approval of the
27board.
284. The authority may enforce the terms of the agreement as
29necessary and appropriate.
30 Sec. 7. NEW SECTION. 15.286 Sales and use tax refund.
311. An eligible business that has been issued a tax incentive
32certificate under the program shall be entitled to a refund
33of the sales and use taxes paid under chapter 423 for gas,
34electricity, water, and sewer utility services, tangible
35personal property, or on services rendered, furnished, or
-9-1performed to or for a contractor or subcontractor and used
2in the fulfillment of the contract for the construction or
3equipping of a facility that is part of the eligible business’s
4project. Taxes attributable to intangible property and
5furniture and furnishings shall not be refunded.
62. To receive the sales and use tax refund, the eligible
7business shall file a claim with the department of revenue as
8follows:
9a. The contractor or subcontractor shall state under oath,
10on forms provided by the department of revenue, the amount of
11the sales of tangible personal property or services rendered,
12furnished, or performed including water, sewer, gas, and
13electric utility services upon which sales or use tax has been
14paid prior to contract completion, and shall submit the forms
15to the eligible business before contract completion.
16b. The eligible business shall inform the department of
17revenue in writing of contract completion. The eligible
18business shall, after contract completion, submit an
19application to the department of revenue for a refund of the
20amount of the sales and use taxes paid pursuant to chapter 423
21upon any tangible personal property, or services rendered,
22furnished, or performed, including water, sewer, gas, and
23electric utility services. The application shall be submitted
24in the form and manner prescribed by the department of revenue.
25The department of revenue shall audit the application and,
26if approved, issue a warrant to the eligible business in the
27amount of the sales or use tax which has been paid to the
28state of Iowa under subsection 1. The eligible business’s
29application must be submitted to the department of revenue
30within one year after the project completion date. An
31application filed by the eligible business in accordance with
32this section shall not be denied by reason of a limitation set
33forth in chapter 421 or 423.
34c. The refund shall be remitted by the department of revenue
35to the eligible business equally over five tax years.
-10- 13. A contractor or subcontractor that willfully makes a
2false report of tax paid under this section is guilty of an
3aggravated misdemeanor, and shall be liable for payment of the
4tax and any applicable penalty and interest.
5 Sec. 8. NEW SECTION. 15.286A Qualifying investment tax
6credit.
71. The authority may authorize a tax credit for an eligible
8business that is up to five percent of the eligible business’s
9qualifying investment in a certified site. The eligible
10business shall not claim the tax credit until the eligible
11business’s project has been placed in service, and at least
12fifty percent of the created jobs the eligible business
13agreed to in the agreement under section 15.285, and that
14pay at least one hundred forty percent of the qualifying
15wage threshold, have been added to the eligible business’s
16payroll. The department of revenue shall remit the tax credit
17to the eligible business equally over five tax years. The tax
18credit shall be allowed against taxes imposed under chapter
19422, subchapter II, III, or V, and against the moneys and
20credits tax imposed in section 533.329. If the eligible
21business is a partnership, S corporation, limited liability
22company, cooperative organized under chapter 501 and filing
23as a partnership for federal tax purposes, or estate or trust
24electing to have the income taxed directly to the individual,
25an individual may claim the tax credit allowed. The amount
26claimed by the individual shall be based upon the pro rata
27share of the individual’s earnings of the partnership, S
28corporation, limited liability company, cooperative organized
29under chapter 501 and filing as a partnership for federal tax
30purposes, or estate or trust. Any tax credit in excess of
31the eligible business’s tax liability for the tax year may be
32refunded or, at the eligible business’s election, credited to
33the eligible business’s tax liability in any of the following
34five consecutive tax years or until depleted, whichever occurs
35first. A tax credit shall not be carried back to a tax year
-11-1prior to the tax year in which the tax credit is first claimed
2by the eligible business.
32. If within five years of the date the authority issues
4an eligible business a tax credit under subsection 1, the
5eligible business sells, disposes of, razes, or otherwise
6renders unusable all or a part of the land, buildings, or
7other structures for which the tax credit was claimed under
8this section, 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 one of the following
12amounts:
13a. One hundred percent of the tax credit claimed under
14this section 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 one
17year after the date the authority issued the tax credit to the
18eligible business.
19b. Eighty 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 two
23years after the date the authority issued the tax credit to the
24eligible business.
25c. Sixty percent of the tax credit claimed under this
26section if all or a part of the land, buildings, or other
27structures for which the tax credit was claimed under this
28section cease to be eligible for the tax credit within three
29years after the date the authority issued the tax credit to the
30eligible business.
31d. Forty percent of the tax credit claimed under this
32section if all or a part of the land, buildings, or other
33structures for which the tax credit was claimed under this
34section cease to be eligible for the tax credit within four
35years after the date the authority issued the tax credit to the
-12-1eligible business.
2e. Twenty percent of the tax credit claimed under this
3section if all or a part of the land, buildings, or other
4structures for which the tax credit was claimed under this
5section cease to be eligible for the tax credit within five
6years after the date the authority issued the tax credit to the
7eligible business.
8 Sec. 9. NEW SECTION. 15.286B Withholding tax credit.
91. From the remittance due to the department of revenue
10pursuant to section 422.16, subsection 2, an eligible business
11may withhold an amount not to exceed three percent of the gross
12wages paid to each employee in a created job that pays at least
13the qualifying wage threshold pursuant to the agreement under
14section 15.285.
152. If the amount withheld under subsection 1 is less than
16three percent of the gross wages paid to each employee in a
17created job that pays at least one hundred forty percent of
18the qualifying wage threshold, the eligible business shall
19receive a credit against the remaining withholding taxes due
20from the eligible business, or the eligible business may carry
21the credit forward up to five consecutive tax years or until
22depleted, whichever is earlier.
233. In any tax year, the aggregate amount of withholding tax
24credit under this section and under any other program for which
25an eligible business is receiving a withholding tax credit
26shall not exceed the amount the eligible business is required
27to deduct and remit to the department of revenue under section
28422.16, subsection 2, for that tax year.
29 Sec. 10. NEW SECTION. 15.287 Foreign businesses —
30acquisition of agricultural land.
311. If a foreign business’s proposed project is located on a
32mega site that includes agricultural land, the requirements of
33section 9I.3, subsection 3, paragraph “f”, must be satisfied in
34order for the foreign business to be eligible for the program.
352. a. A foreign business under subsection 1 that is
-13-1approved by the authority to participate in the program shall
2enter into an agreement with the authority pursuant to section
315.285. The agreement shall include a provision that requires
4the foreign business to comply with chapter 9I, and specifies
5that failure to do so may result in revocation of all tax
6incentives issued by the authority to the foreign business.
7b. The authority may grant the foreign business one or
8more one-year extensions in which the foreign business must
9comply with section 9I.4. The authority shall not grant
10more than five one-year extensions. The community in which
11the agricultural land is located must approve each one-year
12extension by ordinance or resolution prior to the authority
13granting each extension. The foreign business shall comply
14with the remaining provisions of chapter 9I to the extent the
15provisions do not conflict with this section.
16 Sec. 11. NEW SECTION. 15.288 Other incentives.
171. Except for the high quality jobs program administered
18by the authority pursuant to sections 15.326 through 15.336,
19and the targeted jobs withholding credit pursuant to section
20403.19A, an eligible business may apply for and be eligible to
21receive other federal, state, and local incentives in addition
22to the tax incentives issued by the authority to the eligible
23business under the program.
242. The authority, in its discretion, may prohibit an
25eligible business that has been issued tax incentives under
26the program from receiving any additional tax incentive, tax
27credit, grant, loan, or other financial assistance under any
28program administered by the authority.
29 Sec. 12. NEW SECTION. 15.289 Property tax exemption.
301. A community in which an eligible business’s project
31is located may grant the eligible business a property tax
32exemption for all of, or a portion of, the actual value added
33by improvements to real property directly related to the
34eligible business’s created jobs. The community may allow a
35property tax exemption for a period not to exceed twenty years
-14-1beginning the year that the improvements to real property are
2first assessed for taxation.
32. For purposes of this section, “improvements” means new
4construction, and rehabilitation of and additions to existing
5structures.
63. A property tax exemption granted under subsection 1 shall
7apply to all taxing districts, except for school districts, in
8which the real property is located.
9EXPLANATION
10The inclusion of this explanation does not constitute agreement with
11the explanation’s substance by the members of the general assembly.
12This bill establishes a major economic growth attraction
13program (program) to be administered by the economic
14development authority (authority).
15To be eligible to receive tax incentives (incentives) under
16the program, a business’s proposed project (project) must
17be located on a certified site greater than 250 acres that
18the authority has determined is suitable for the project,
19and the business’s qualifying investment in the project must
20exceed $1 billion. Other requirements for a business to be
21eligible for the program are detailed in the bill. “Qualifying
22investment” is defined in the bill as a capital investment
23in real property located on a certified site, including the
24purchase price of the land, site preparation, infrastructure,
25and building construction. “Qualifying investment” also means
26a capital investment in depreciable assets. “Certified site”
27is defined as a site that has been issued a certificate of
28readiness by the authority pursuant to Code section 15E.18.
29“Tax incentives” and “project” are also defined in the bill.
30In determining if a business is eligible to participate
31in the program, the authority shall consider a variety of
32factors, including but not limited to whether the jobs created
33by the business’s project are high wage, low turnover, provide
34comprehensive benefits, and expose employees to minimal
35occupational hazards; the impact of the project on businesses
-15-1that compete with the business applying to the program; and
2the project’s economic impact on the state. The bill requires
3the authority to place greater emphasis on businesses that
4have a high proportion of in-state suppliers and few in-state
5competitors; and on projects that diversify the state economy
6and have the potential to create jobs on an ongoing basis.
7Applications for the program shall be submitted in the
8form and manner prescribed by the authority by rule and be
9accompanied by an application fee in an amount determined by
10the authority by rule. In determining a business’s eligibility
11for the program, the authority may engage outside experts
12to complete a technical, financial, or other review of an
13application if such review is outside the expertise of the
14authority. The authority and the authority’s board (board)
15may negotiate with an eligible business regarding the terms
16of, and the aggregate value of, the incentives the eligible
17business may receive under the program. The board may
18authorize any combination of incentives available under the
19program for an eligible business. The board may authorize an
20exemption to restrictions on agricultural land holdings for a
21foreign business that qualifies for the program pursuant to
22the requirements detailed in the bill. “Foreign business” is
23defined in the bill.
24The bill requires an eligible business that is approved to
25participate in the program to enter into an agreement with
26the authority that specifies the criteria for the successful
27completion of all requirements of the program. The agreement
28shall contain, at a minimum, the provisions as detailed in
29the bill. The business shall satisfy all applicable terms of
30the agreement by the project completion date; however, the
31board may for good cause extend the project completion date or
32otherwise amend the terms of the agreement. The board shall
33not amend the agreement to allow an increase in the maximum
34aggregate value of the incentives originally authorized by
35the board. “Project completion date” is defined in the bill.
-16-1The bill permits the authority to enforce the terms of the
2agreement as necessary and appropriate.
3An eligible business that has been issued a certificate
4under the program shall be entitled to a refund of the sales
5and use taxes (refund) paid under Code chapter 423 for gas,
6electricity, water, and sewer utility services, tangible
7personal property, or on services rendered, furnished, or
8performed to or for a contractor or subcontractor and used in
9the fulfillment of the contract relating to the construction or
10equipping of a facility that is part of the eligible business’s
11project. Taxes attributable to intangible property and
12furniture and furnishings shall not be refunded. The procedure
13for the business to receive the refund is detailed in the
14bill. The refund shall be remitted by the department to the
15eligible business equally over five tax years. A contractor or
16subcontractor that willfully makes a false report of tax paid
17is guilty of an aggravated misdemeanor, and shall be liable for
18payment of the tax and any applicable penalty and interest. An
19aggravated misdemeanor is punishable by confinement for no more
20than two years and a fine of at least $855 but not more than
21$8,540.
22The authority may authorize a tax credit for an eligible
23business that is up to 5 percent of the business’s qualifying
24investment in a certified site. The eligible business
25shall not claim the tax credit until the eligible business’s
26project has been placed in service, and at least 50 percent
27of the created jobs the eligible business agreed to in the
28agreement, and that pay at least 140 percent of the qualifying
29wage threshold, have been added to the eligible business’s
30payroll. The department shall remit the tax credit to the
31eligible business equally over five tax years. The tax credit
32shall be allowed against taxes imposed under Code chapter
33422, subchapter II, III, or V, and against the moneys and
34credits tax imposed in Code section 533.329. Any tax credit
35in excess of the eligible business’s tax liability for the tax
-17-1year may be refunded or, at the eligible business’s election,
2credited to the eligible business’s tax liability in each of
3the following five consecutive tax years or until depleted,
4whichever occurs first. A tax credit shall not be carried back
5to a tax year prior to the tax year in which the tax credit
6is first claimed by the eligible business. If within five
7years of the date the authority issues an eligible business a
8qualifying investment tax credit the eligible business sells,
9disposes of, razes, or otherwise renders unusable all or a part
10of the land, buildings, or other structures for which the tax
11credit was claimed, the tax liability of the eligible business
12for the year in which all or part of the land, buildings, or
13other existing structures are sold, disposed of, razed, or
14otherwise rendered unusable shall be increased by an amount as
15detailed in the bill.
16From the remittance due to the department of revenue
17pursuant to Code section 422.16(2), an eligible business may
18withhold an amount not to exceed 3 percent of the gross wages
19paid to each employee in a created job that pays at least
20the qualifying wage threshold specified in the agreement the
21business entered into with the authority. “Created job” and
22“qualifying wage threshold” are defined in the bill. If the
23amount withheld is less than 3 percent of the gross wages
24paid to each employee in a created job that pays at least 140
25percent of the qualifying wage threshold, the eligible business
26shall receive a credit against the remaining withholding
27taxes due from the business, or the business may carry the
28credit forward up to five consecutive tax years or until
29depleted, whichever is earlier. In any tax year, the aggregate
30amount of withholding tax credit under this program, and any
31other program for which an eligible business is receiving
32a withholding tax credit, shall not exceed the amount the
33eligible business is required to deduct and remit to the
34department of revenue under Code section 422.16(2) for that tax
35year.
-18- 1If a foreign business’s proposed project is located on a
2mega site that includes agricultural land, the requirements as
3detailed in the bill must be satisfied for the foreign business
4to be eligible for the program. “Mega site” is defined in the
5bill as a certified site greater than 1,000 acres. A foreign
6business that is approved by the authority to participate in
7the program shall enter into an agreement with the authority
8that includes a provision that requires the foreign business
9to comply with Code chapter 9I, and specifies that failure to
10do so may result in revocation of incentives issued by the
11authority to the foreign business. The authority may grant the
12foreign business one or more one-year extensions in which the
13foreign business must come into compliance with Code section
149I.4. The authority shall not grant a business more than five
15one-year extensions. The community in which the agricultural
16land is located must approve each extension by ordinance or
17resolution prior to the authority granting each extension.
18Except for the high quality jobs program, and the targeted
19jobs withholding credit, an eligible business may apply
20for and be eligible to receive other federal, state, and
21local incentives in addition to the incentives the authority
22issues to the business under the program. The authority, in
23its discretion, may prohibit an eligible business that has
24been issued incentives under the program from receiving any
25additional tax incentive, tax credit, grant, loan, or other
26financial assistance under any program administered by the
27authority.
28The bill allows a community in which an eligible business’s
29project is located to grant the eligible business a property
30tax exemption (exemption) for all of, or a portion of, the
31actual value added by improvements to real property directly
32related to the eligible business’s created jobs. The community
33may allow an exemption for a period not to exceed 20 years
34beginning the year that the improvements are first assessed
35for taxation. “Improvements” is defined as new construction,
-19-1and rehabilitation of and additions to existing structures.
2An exemption granted by a community shall apply to all taxing
3districts, except for school districts, in which the real
4property is located.
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