Bill > HF2389

Introduced Session

This bill relates to the establishment of programs administered by the economic development authority, including the interactive digital entertainment program, game studio investment matching program, game industry fellowship program, and game studio grant program. DIVISION I —— INTERACTIVE DIGITAL ENTERTAINMENT PROGRAM, GAME STUDIO INVESTMENT MATCHING PROGRAM, GAME INDUSTRY FELLOWSHIP PROGRAM, AND GAME STUDIO GRANT PROGRAM. The bill requires the economic development authority (authority) to establish and administer an interactive digital entertainment tax credit program (IDE program) to award tax credits to qualified developers for qualified expenditures. The bill defines “qualified expenditures” as labor, goods, services, and production costs directly related to a qualified production. The authority shall establish eligibility criteria by rule for participation in the IDE program that, at a minimum, requires a qualified developer to maintain a physical presence in the state and have a minimum payroll in the state of $250,000. An application for the IDE program shall be submitted by a qualified developer to the authority for approval as prescribed by the authority. If a qualified developer’s application is approved, the maximum tax credit that shall be awarded to the qualified developer shall equal 30 percent of the qualified developer’s documented qualified expenditures, except that a qualified developer may receive an additional tax credit equal to five percent of qualified expenditures for qualified productions displaying a “made in Iowa” logo. Prior to the authority issuing a tax credit certificate, the qualified developer shall submit documentation that all qualified expenditures were incurred following approval of the qualified developer’s application. An interactive digital entertainment program fund (IDE fund) is created in the state treasury under the control of the authority consisting of moneys appropriated to the authority and any other moneys available to, obtained by, or accepted by the authority for placement in the fund. The fund shall be used to provide tax credits under the IDE program. The aggregate value of tax credits awarded by the authority and claimed by qualified developers shall not exceed $20 million in any one fiscal year. The authority shall adopt rules to administer the IDE program. The bill requires the authority to establish and administer a game studio investment matching program (matching program). The authority may provide a forgivable loan to an investor that matches dollar for dollar a private investment in an Iowa-based game development company (company). The authority shall not provide forgivable loans to investors in any one company that exceed an aggregate value of $10 million per fiscal year. The bill defines “private investment” as an investment from a publisher advance, venture capital, angel investor, or other source of private funds. Applications for the matching program shall be submitted to the authority in the form and manner prescribed by the authority by rule. Beginning on the date a forgivable loan is provided to an investor, the investor shall not be required to make a payment on the loan if the private investment is in an Iowa-based game development company with 75 percent of employees residing in the state and the company is physically located in the state for a minimum of five consecutive years, at which time the forgivable loan shall be forgiven in its entirety. If the Iowa-based game development company fails to meet these requirements, the investor shall repay the forgivable loan in an amount proportional to the amount of time the Iowa-based game development company was not in compliance with the requirements, as determined by the authority by rule. The authority shall adopt rules to administer the matching program. The matching program applies to private investments in companies made on or after July 1, 2026. The bill requires the authority to establish and administer a game industry fellowship program (fellowship program) to provide two-year fellowships for professionals to relocate to the state. “Professional” is defined in the bill. The authority shall administer the fellowship program and provide grants for 10 to 15 fellowships. A professional awarded a grant shall receive a grant of $150,000 to $200,000 for each year of the two-year fellowship to be used for relocation expenses and as compensation for teaching at a community college or state university, consulting for game start-up companies and studios in the state, or industry building. Grant funds shall not be given to family members, political organizations, or used for a personal business venture by a professional. To be eligible for the fellowship program, a professional must commit to residing in the state and working in the video game industry for a minimum of one additional year following the end of the fellowship. A professional that violates the residency or work requirement shall repay the amount of the grant used for relocation expenses. Prior to applying for the fellowship program, a professional shall disclose any potential conflicts of interest to the authority. A review board as described in the bill shall review applications for the fellowship program and select professionals for participation in the fellowship program. Members of the review board shall disclose any conflict of interest and shall not vote on a fellowship program application submitted by a professional that works for a company in which the member or a family member holds a financial interest, or to which the member or a family member has a family connection. A professional awarded a grant shall submit quarterly reports to the authority that document the professional’s work activities, and independent auditors shall review the quarterly reports and verify the professional’s compliance with the fellowship program requirements. A professional found to be in violation of the program requirements shall repay the grant funds to the authority. The bill establishes the game studio grant program (grant program), administered by the authority, to provide grants to eligible game studios for the recruitment of professionals. “Eligible game studio” means a game studio headquartered in the state and 75 percent of the game studio’s employees reside in the state. “Professional” is defined in the bill. An eligible game studio may apply for a grant under the grant program when the eligible game studio identifies a professional as a candidate for a position, if the position is a director-level position, the professional does not reside or work in the state, has not worked in the state for two years, and would move to the state for the position. The salary for the position must be at least $120,000, and the professional must commit to residing and working in the state for a minimum of three years. Prior to being awarded a grant, an eligible game studio shall provide to the authority the information detailed in the bill. An eligible game studio accepted to the grant program may be awarded a grant in an amount of $50,000 to $75,000 per hire of a professional as detailed by the bill, paid in installments. A game studio that uses grant funds for purposes that do not comply with the bill shall be required to repay the cost of all or part of the grant. If a professional does not reside and work in the state for the entire three-year period, the professional and the game studio shall repay the grant to the authority. The authority shall review applications for the program within 30 days after receipt. The authority shall not issue a grant for a founder or executive of a game studio, or the relative of a founder or executive of a game studio. An eligible game studio may receive no more than three game studio grants over a period of five consecutive years. The authority shall conduct an annual audit of an eligible game studio to ensure that the position for which the studio received a grant is a legitimate director-level or higher position, and the position’s title was not inflated for purposes of receiving a grant. An eligible game studio found to have improperly inflated a position title to receive a grant shall be required to repay the grant and shall be permanently ineligible for the grant program. The authority shall adopt rules to administer the grant program. The bill requires the authority to file annual reports with the general assembly by June 30 of each year detailing the participation, number of jobs created, economic output, and fiscal performance of the IDE program, the matching program, the fellowship program, and the grant program. DIVISION II —— APPROPRIATIONS. For FY 2026-2027, $3 million is appropriated from the sports wagering receipts fund to the authority to be used for purposes of the fellowship program and grant program. For FY 2027-2028, and for each fiscal year thereafter, $5 million is appropriated from the sports wagering receipts fund to the authority to be used for purposes of the fellowship program and grant program. For FY 2026-2027, $20 million is appropriated from the general fund of the state to the authority for deposit in the IDE program fund. For FY 2026-2027, $20 million is appropriated from the general fund of the state to the authority for the matching program.

AI Summary

Committee Categories

Gary Mohr (R)*, 

House Appropriations Subcommittee (12:00:00 2/18/2026 RM 103) (on 02/18/2026)

Official Document