Bill > SF2506

Introduced Session

This bill relates to economic development authority programs and tax credits; load forecasting and the state electric transmission system expansion plans; and the industrial new jobs training program. DIVISION I —— HEADQUARTERS EXPANSION AND DEVELOPMENT FOR GROWTH AND EMPLOYMENT PROGRAM. The bill creates a headquarters expansion and development for growth and employment program (EDGE program) to provide tax incentives to eligible businesses. The qualifications for an eligible business, and the factors the economic development authority (authority) shall consider in determining if a business is eligible to participate in the EDGE program are provided in the bill. Applications for the EDGE program shall be submitted to the authority. The terms of, and aggregate value of, a tax incentive may be negotiated between an eligible business, the authority, and the board comprised of members of the authority appointed by the governor (board). An eligible business that is approved to participate in the EDGE program shall enter into an agreement with the authority specifying the criteria for successful completion of the program requirements. The requirements for the program agreement are detailed in the bill, and the authority may enforce such requirements. If the authority enters into an agreement with an eligible business, the authority may authorize a qualifying wage tax credit for the eligible business for a period not to exceed three years as specified in the agreement. The authority may issue a qualifying wage tax credit to the eligible business for each year of the authorized period upon verification that the eligible business employed the required number of employees in new corporate jobs and retained corporate jobs that pay at least 200 percent of the qualifying wage threshold. The tax credit for each year of the authorized period shall equal no more than the amount specified in the bill. A taxpayer shall include a tax credit certificate issued by the authority with the taxpayer’s tax return to claim the tax credit. An individual may claim a tax credit on behalf of a partnership, limited liability company, S corporation, estate, or trust electing to have income taxed directly to the individual in an amount based upon the pro rata share of the individual’s earnings. Any tax credit in excess of the taxpayer’s liability for the tax year is refundable or may be credited to the immediately succeeding tax year. Tax credit certificates are not transferable. The authority may prohibit an eligible business that receives a tax incentive from the program from receiving any other tax incentives or financial assistance under any program administered by the authority. Under the bill, individual and corporate income taxes, financial institution franchise taxes, and money and credits taxes on credit unions shall be reduced by a qualifying wage tax credit. DIVISION II —— MAJOR ECONOMIC GROWTH ATTRACTION PROGRAM. The bill amends the definition of a “foreign adversary” under the major economic growth attraction program (MEGA program). Under current law, a foreign adversary is a foreign government or foreign nongovernment person as determined in 15 C.F.R. §7.4, and as listed in 15 C.F.R. §7.4(a) at any time from March 4, 2024, through the termination of the program. Under the bill, a foreign adversary is a foreign government or foreign nongovernment person as determined in 15 C.F.R. §7.4, and as listed in 15 C.F.R. §7.4(a) at any time from March 4, 2024, through July 17, 2024, or, as determined in 15 C.F.R. §791.4, and as listed in 15 C.F.R. §791.4 at any time from July 18, 2024, through the termination of the program. Under current law, the board shall not authorize tax incentives available under the MEGA program, or an exemption to restrictions on agricultural land holdings, for more than two eligible businesses, or on or after January 1, 2027, whichever occurs first. The bill extends this provision to January 1, 2030. DIVISION III —— BUSINESS INCENTIVES FOR GROWTH PROGRAM TRAINING FUND. The bill creates a business incentives for growth program training fund (fund) in the state treasury under the control of the authority. Under the bill, an amount up to 1.5 percent of the gross wages an eligible business pays to employees specified in an agreement with the authority shall be credited to the fund from the withholding payments made by the eligible business. Such jobs shall be identified by the authority as having a sufficient economic impact to warrant assistance with training. On a quarterly basis, an eligible business shall disclose the amount of gross wages that qualify to the authority and to the department of revenue (DOR). The authority shall calculate the amount of gross wages to be deposited into the fund, and the DOR shall deposit that amount into the fund. Moneys in the fund shall be used to reimburse training expenses incurred by an eligible business that are associated with the eligible business’s project, and that meet the requirements detailed in the bill. An eligible business that has been approved to receive a reimbursement from the fund shall not receive any other state incentives for the same purpose. DIVISION IV —— REPEAL OF THE NEW JOBS TAX CREDIT. The bill repeals the new jobs tax credit under Code section 422.11A. The bill makes a conforming change to Code section 2.48(3)(e)(7). This division of the bill, being deemed of immediate importance, takes effect upon enactment. DIVISION V —— LOAD FORECASTING. The bill relates to load forecasting and analysis of electric transmission system expansion plans. The bill directs the authority to commission Iowa state university of science and technology (ISU) to produce a report forecasting the probable future growth of electricity use within the state and within the midwest region. The report must include a load forecast and an analysis of electric transmission system expansion plans, and must be commissioned from ISU at least once every two years. In developing the report, ISU must solicit input from residential, commercial, and industrial consumers and the electric industry. The published report shall only rely on information provided by utilities in aggregate form and must exclude any identifying information about an individual utility’s electric system. The load forecast and electric transmission system expansion planning analysis must be published by December 31, 2028, and biennially published on or before December 31 thereafter. The authority may commission other reports as necessary to evaluate energy needs. A report shall be made publicly available on the authority’s internet site. The bill grants the Iowa utilities commission (commission) authority to compel public utilities to share with ISU the utility’s information necessary to develop the load forecasts and electric transmission system expansion planning analysis required under the bill. A public utility may use a third party to prepare such information to be shared with ISU and may enter into a nondisclosure agreement with ISU requiring shared information be kept confidential. The bill also provides that the load forecast and electric transmission system expansion planning aggregate analysis may be used as evidentiary support in any proceedings before the commission as detailed in the bill. This authority to compel includes all electric utilities, including electric public utilities with few customers, electric cooperative corporations and associations, and municipally owned utilities. The bill requires the commission to direct all electric utilities to remit to the treasurer of state for deposit in the electric transmission system expansion planning analysis and load forecasting fund, as created in the bill, not more than .02 percent of the utilities’ total gross intrastate operating revenues from the prior year. Moneys in the fund are appropriated to the authority for the purpose of commissioning the load forecasting report and analysis. The bill directs the commission to establish by rule an aggregate maximum amount of remittances and a schedule for remittances. The remittances are in addition to assessments otherwise permitted and may be included in budgets approved for energy efficiency implementation as detailed in the bill. DIVISION VI —— IOWA INDUSTRIAL NEW JOBS TRAINING PROGRAM. Under current law, payment of program costs shall not be deferred for a period of more than 10 years from the date of commencement of the project. Under the bill, for an agreement entered into on or before June 30, 2026, payment shall not be deferred for more than 10 years and may not be extended, and for an agreement on or after July 1, 2026, payment may not be deferred for more than 5 years. A community college and an employer shall notify the department of workforce development upon entering into the agreement. Under the bill, a project shall not be funded unless the department of workforce development approves the agreement within 30 days of receipt of notice of an agreement. The bill requires a community college that receives a new jobs credit from withholding to annually report a detailed accounting of the community college’s bond interest. Under the bill, to be eligible for the new jobs credit from withholding, a community college most document that program costs are incurred over the period of time specified in the agreement with an employer, that program costs are not incurred to reimburse travel, conferences, or legal fees, and that administrative expenses do not account for more than 15 percent of the program costs. DIVISION VII —— IOWA INDUSTRIAL NEW JOBS TRAINING PROGRAM INTERIM COMMITTEE. The bill requests the legislative council to establish an interim study committee to review the new jobs training program and make recommendations regarding the program. Membership of the interim study committee, and the responsibilities of the committee, are detailed in the bill. The interim study committee shall submit a report detailing the findings and recommendations to the general assembly by December 15, 2026. DIVISION VIII —— RESEARCH ACTIVITIES CREDIT. The bill clarifies, for a research credit based on conducting agriscience research, which sections of the Internal Revenue Code apply and what claims a business is allowed.

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Withdrawn. S.J. 1009. (on 05/03/2026)

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