Permitting businesses’ new on-site daycare facilities or businesses’ expansion of existing on-site daycare facilities to qualify as projects under the high quality jobs program, and making penalties applicable

This bill permits businesses’ new on-site daycare facilities or businesses’ expansion of existing on-site daycare facilities to qualify as projects under the high quality jobs program. Under current law, the economic development authority (authority) may consider whether a proposed project will provide a licensed childcare center for a business’s employees in determining a business’s eligibility for the high quality job program (program). The bill permits the authority to provide tax incentives (incentives) or project completion assistance (assistance) under the program to a business for a project that involves a new on-site child care facility or the expansion of an existing on-site facility that offers low-cost child care for the business’s employees. The authority may provide incentives or assistance under the program to a business for a project that creates or retains jobs that will pay a percent of the qualifying wage threshold as determined pursuant to rules adopted by the authority. The bill permits the authority, pursuant to rules adopted by the authority, to determine metrics to qualify a business to be eligible for the program. In determining the eligibility of a business’s project under the program, the bill requires the authority to consider the quality of the jobs to be created or retained, with an emphasis placed on jobs that are full-time or career-type positions, that provide comprehensive health benefits, and that pay wages equal to or higher than similar jobs within a 25-mile radius of the business’s proposed project. The authority must make a good-faith effort to identify existing child care providers in competition with the business’s proposed project and the probability that the proposed project will displace employees of the existing child care providers. Jobs created or retained by the proposed project as a result of similar jobs being displaced in a 25-mile radius from the business cannot be considered by the authority as jobs created or retained. The bill also requires the authority to consider the economic impact of the proposed project on the state. In measuring economic impact, the authority must place greater emphasis on projects that are located in economically distressed areas, that will have the capacity to care for or more children, that are located in areas that have an inadequate number of existing child care providers, and that will provide child care to the business’s employees at a low-cost rate as determined pursuant to rules adopted by the authority. The bill defines “economically distressed area” as a county that ranks among the bottom of all Iowa counties, as measured by either the average monthly unemployment level for the most recent 12-month period, or the average annualized unemployment level for the most recent five-year period. If a business that is approved by the authority to receive incentives or assistance for its project either closes or reduces the capacity of the child care facility for which the incentives or assistance was received, the authority has the discretion to reduce or eliminate some or all of the incentives or assistance, and the business may be subject to repayment of all or a portion of the incentives or assistance that it has received. A business that is awarded tax incentives for a child care facility is entitled to a refund of the sales and use taxes paid under Code chapter 423 for gas, electricity, water, or sewer utility services, goods, wares, or merchandise, or on services rendered, furnished, or performed to or for a contractor or subcontractor and used in the fulfillment of a written contract relating to the construction or equipping of a child care facility that is part of the project of the eligible business. Taxes attributable to intangible property, furniture, and furnishings cannot be refunded. The process by which a business may receive a refund of the sales and use taxes paid is outlined in the bill. A contractor or subcontractor who willfully makes a false report of sales and use taxes paid under the provisions of the bill commits a simple misdemeanor and is liable for the payment of the taxes and any applicable penalties and interest. A simple misdemeanor is punishable by confinement for no more than days or a fine of at least $105 but not more than $855 or by both. The bill directs the authority to adopt rules as necessary to administer the provisions of the bill. The bill allows the department of revenue to adopt rules as necessary to administer the provisions of the bill.