Proyectos de ley › 90.ª Asamblea General
Establishing the major economic growth attraction program to be administered by the economic development authority, and providing penalties
Presentado por el comité Economic Growth and Technology de la Cámara
Dónde está ahora
- Hecho: Presentado7 de febrero de 2023
- Hecho: Subcomité7 de febrero de 2023
- Hecho: Comité de la Cámara2 de marzo de 2023
- Hecho: Lo aprueba la Cámara6 de marzo de 202489–4
- Se saltó: Comité del SenadoSe saltó
- Hecho: Lo aprueba el Senado3 de mayo de 202345–2
- Hecho: A gobernador(a)29 de abril de 2024
- Hecho: Firmado como ley1 de mayo de 2024
SF 574 se hizo ley → La misma legislación se aprobó como SF 574, así que esta versión se dejó de lado. Ir a SF 574 ¿Qué es el embudo (funnel)?
Qué contiene
Resumen con IA Iowa is creating a new program to attract large businesses that plan to invest more than $1 billion into projects on specific large pieces of land. To get tax breaks and refunds, these companies must create high-paying jobs and meet certain requirements set by the state. The program also allows some foreign businesses to use agricultural land for these projects if they follow specific rules. (Todavía no está traducido al español.)1
Lea la explicación oficial (en inglés)
This bill establishes a major economic growth attraction program (program) to be administered by the economic development authority (authority). To be eligible to receive tax incentives (incentives) under the program, a business’s proposed project (project) must be located on a certified site greater than 250 acres that the authority has determined is suitable for the project, and the business’s qualifying investment in the project must exceed $1 billion. Other requirements for a business to be eligible for the program are detailed in the bill. “Qualifying investment” is defined in the bill as a capital investment in real property located on a certified site, including the purchase price of the land, site preparation, infrastructure, and building construction. “Qualifying investment” also means a capital investment in depreciable assets.18. “Tax incentives” and “project” are also defined in the bill. In determining if a business is eligible to participate in the program, the authority shall consider a variety of factors, including but not limited to whether the jobs created by the business’s project are high wage, low turnover, provide comprehensive benefits, and expose employees to minimal occupational hazards; the impact of the project on businesses that compete with the business applying to the program; and the project’s economic impact on the state. The bill requires the authority to place greater emphasis on businesses that have a high proportion of in-state suppliers and few in-state competitors; and on projects that diversify the state economy and have the potential to create jobs on an ongoing basis. Applications for the program shall be submitted in the form and manner prescribed by the authority by rule and be accompanied by an application fee in an amount determined by the authority by rule. In determining a business’s eligibility for the program, the authority may engage outside experts to complete a technical, financial, or other review of an application if such review is outside the expertise of the authority. The authority and the authority’s board (board) may negotiate with an eligible business regarding the terms of, and the aggregate value of, the incentives the eligible business may receive under the program. The board may authorize any combination of incentives available under the program for an eligible business. The board may authorize an exemption to restrictions on agricultural land holdings for a foreign business that qualifies for the program pursuant to the requirements detailed in the bill. “Foreign business” is defined in the bill. The bill requires an eligible business that is approved to participate in the program to enter into an agreement with the authority that specifies the criteria for the successful completion of all requirements of the program. The agreement shall contain, at a minimum, the provisions as detailed in the bill. The business shall satisfy all applicable terms of the agreement by the project completion date; however, the board may for good cause extend the project completion date or otherwise amend the terms of the agreement. The board shall not amend the agreement to allow an increase in the maximum aggregate value of the incentives originally authorized by the board. “Project completion date” is defined in the bill. The bill permits the authority to enforce the terms of the agreement as necessary and appropriate. An eligible business that has been issued a certificate under the program shall be entitled to a refund of the sales and use taxes (refund) paid under Code chapter 423 for gas, electricity, water, and sewer utility services, tangible personal property, or on services rendered, furnished, or performed to or for a contractor or subcontractor and used in the fulfillment of the contract relating to the construction or equipping of a facility that is part of the eligible business’s project. Taxes attributable to intangible property and furniture and furnishings shall not be refunded. The procedure for the business to receive the refund is detailed in the bill. The refund shall be remitted by the department to the eligible business equally over five tax years. A contractor or subcontractor that willfully makes a false report of tax paid is guilty of an aggravated misdemeanor, and shall be liable for payment of the tax and any applicable penalty and interest. An aggravated misdemeanor is punishable by confinement for no more than two years and a fine of at least $855 but not more than $8,540. The authority may authorize a tax credit for an eligible business that is up to percent of the business’s qualifying investment in a certified site. The eligible business shall not claim the tax credit until the eligible business’s project has been placed in service, and at least percent of the created jobs the eligible business agreed to in the agreement, and that pay at least 140 percent of the qualifying wage threshold, have been added to the eligible business’s payroll. The department shall remit the tax credit to the eligible business equally over five tax years.329. Any tax credit in excess of the eligible business’s tax liability for the tax year may be refunded or, at the eligible business’s election, credited to the eligible business’s tax liability in each of the following five consecutive tax years or until depleted, whichever occurs first. A tax credit shall not be carried back to a tax year prior to the tax year in which the tax credit is first claimed by the eligible business. If within five years of the date the authority issues an eligible business a qualifying investment tax credit the eligible business sells, disposes of, razes, or otherwise renders unusable all or a part of the land, buildings, or other structures for which the tax credit was claimed, the tax liability of the eligible business for the year in which all or part of the land, buildings, or other existing structures are sold, disposed of, razed, or otherwise rendered unusable shall be increased by an amount as detailed in the bill.16(2), an eligible business may withhold an amount not to exceed percent of the gross wages paid to each employee in a created job that pays at least the qualifying wage threshold specified in the agreement the business entered into with the authority. “Created job” and “qualifying wage threshold” are defined in the bill. If the amount withheld is less than percent of the gross wages paid to each employee in a created job that pays at least 140 percent of the qualifying wage threshold, the eligible business shall receive a credit against the remaining withholding taxes due from the business, or the business may carry the credit forward up to five consecutive tax years or until depleted, whichever is earlier.16(2) for that tax year. If a foreign business’s proposed project is located on a mega site that includes agricultural land, the requirements as detailed in the bill must be satisfied for the foreign business to be eligible for the program. “Mega site” is defined in the bill as a certified site greater than 1,000 acres. A foreign business that is approved by the authority to participate in the program shall enter into an agreement with the authority that includes a provision that requires the foreign business to comply with Code chapter 9I, and specifies that failure to do so may result in revocation of incentives issued by the authority to the foreign business.4. The authority shall not grant a business more than five one-year extensions. The community in which the agricultural land is located must approve each extension by ordinance or resolution prior to the authority granting each extension. Except for the high quality jobs program, and the targeted jobs withholding credit, an eligible business may apply for and be eligible to receive other federal, state, and local incentives in addition to the incentives the authority issues to the business under the program. The authority, in its discretion, may prohibit an eligible business that has been issued incentives under the program from receiving any additional tax incentive, tax credit, grant, loan, or other financial assistance under any program administered by the authority. The bill allows a community in which an eligible business’s project is located to grant the eligible business a property tax exemption (exemption) for all of, or a portion of, the actual value added by improvements to real property directly related to the eligible business’s created jobs. The community may allow an exemption for a period not to exceed years beginning the year that the improvements are first assessed for taxation. “Improvements” is defined as new construction, and rehabilitation of and additions to existing structures. An exemption granted by a community shall apply to all taxing districts, except for school districts, in which the real property is located.
Cambiado después por las enmiendas H-8151, H-8047; vea Enmiendas.
Texto completo del proyecto (en inglés) · Qué cambió antes de aprobarse2
House subcommittee
Named February 7, 2023 (as HSB 147). On February 22, 2023 it recommended passage. Vote Total: 3-0.
Three legislators hear a bill first and recommend what the committee should do; it’s the best time to weigh in. How to take part
Nota fiscal
Can’t be estimated Compare con otros proyectos
Resumen con IA This bill creates the Major Economic Growth and Attraction Program, which allows certain foreign businesses to acquire Iowa agricultural land and receive various tax credits and sales tax refunds. The program is estimated to reduce General Fund revenue by $18.2 million in fiscal year 2028, reaching $18.9 million per project per year in fiscal year 2032. The fiscal impact of potential local property tax exemptions is unknown. (en inglés)3
Lea la nota fiscal (en inglés)
Description
Senate File 574 creates the Major Economic Growth and Attraction (MEGA) Program under the Iowa Economic Development Authority (IEDA). The Bill allows foreign businesses to acquire agricultural land in Iowa and receive tax credits if the foreign business meets certain requirements. Program tax credits under the Bill include a Qualifying Investment Tax Credit, a sales tax refund, and a Withholding Tax Credit. The IEDA Board must not authorize tax incentives available under the 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.
Applications for the MEGA Program will be submitted to the IEDA and must include an application fee set by the IEDA. The terms and value of tax incentives under the Program may be negotiated by the IEDA and the eligible business. If the eligible business fails to comply with requirements of the Program or agreements with the IEDA, the eligible business may be required to repay tax incentives or may be subject to a reduction or elimination of tax incentives. To be eligible for the Program, a business must meet certain requirements, including having a minimum proposed project cost of $1.000 billion.
The IEDA may authorize an investment tax credit for an eligible business of up to 5.0% of the business’s qualifying investment. The tax credit is allowed against individual and corporate income taxes, the franchise tax, and the moneys and credits tax. The tax credit may not be claimed until after the project has been placed in service and at least 50.0% of the project jobs specified in the contract have been created.
An eligible business that has been issued a tax incentive under the Program will receive a refund of the sales and use taxes paid for gas, electricity, water, and sewer utility services; tangible personal property; or services rendered, furnished, or performed that contributed to the construction or equipping of the facility. The refund will be paid by the Iowa Department of Revenue (IDR) equally over five years. A contractor or subcontractor who willfully makes a false report of tax paid under the Program commits an aggravated misdemeanor. An eligible business may claim a withholding tax credit of up to 3.0% of the gross wages paid to each employee in a project job that pays at least the qualifying wage threshold under the agreement. If the amount withheld is less than 3.0% of the gross wages, the business will receive a credit against the remaining withholding tax due or the business may carry forward the credit for up to five consecutive years or until it is depleted.
An eligible business may apply for additional federal, State, and local incentives except for those under the High Quality Jobs Program, the Targeted Jobs Withholding Tax Credit, or other incentives at the discretion of the IEDA.
A community in which an eligible business’s project is located may grant the eligible business a property tax exemption for a portion of the actual value added by improvements to real property directly related to the eligible business’s project jobs. The exemption is not applied to levies on school districts within the taxing jurisdiction.
Division II of the Bill provides that of the $11.7 million appropriation that the IEDA received in FY 2024 from the Skilled Worker and Job Creation Fund for the High Quality Jobs Program in 2023 Iowa Acts, SF 559 (Economic Development Appropriations Act), $300,000 will be allocated for the Certified Sites Program. Moneys allocated must be used to certify sites in counties with a population of less than 50,000 and to certify at least two sites in each congressional district. Division II of the Bill takes effect upon enactment.
Background
Under current law, a foreign business may not acquire agricultural land in the State except as stated in Iowa Code section 9I.3(3). A foreign business is defined under Iowa Code section 9I.1 as a corporation incorporated under the laws of a foreign country, or a business entity whether or not incorporated, in which a majority interest is owned directly or indirectly by nonresident aliens. Legal entities, holding companies, multiple corporations, and other business arrangements do not affect the determination of ownership or control of a foreign business. An aggravated misdemeanor is punishable by confinement for no more than two years and a fine of between $855 and $8,540.
Assumptions
Correctional Impact Assumptions
- The following will not change over the projection period: charge, conviction, and sentencing patterns and trends; prisoner length of stay (LOS); revocation rates; plea bargaining; and other criminal justice policies and practices.
- A lag effect of six months is assumed from the effective date of the Bill to the date of first entry of affected offenders into the correctional system.
- Marginal costs for county jails cannot be estimated due to a lack of data. For purposes of this analysis, the marginal cost for county jails is assumed to be $50 per day.
Fiscal Impact Assumptions
- The Program will be enacted on July 1, 2024; the first agreement will be entered into by the IEDA during FY 2025; and the first claims will be made in FY 2028.
- Because there are no program caps in the Bill, it is assumed that the full amount of the award will be made for each of the tax credits proposed and that all credits will be fully refunded rather than carried forward against future tax liability.
- All credits will be remitted in the same year they are claimed.
- Up to two projects may qualify under the terms of the Bill over the next five years.
- The IEDA will allocate the full amount of the award in the first year of the project, but claims will not be made until three years after the award is granted, upon project completion.
- The 50.0% requirement for jobs created will be met in the first year of the project completion.
- The withholding tax credit will be remitted over a maximum of five years due to the restriction of not withholding more than 3.0% of wages in any one year.
- An amount equal to 25.0% of a project investment will be eligible for a sales tax refund under the Program.
- Businesses eligible for the Program will have no defaults on the contracts causing the IDR to recoup the remitted credits.
- Growth trends in future fiscal years are based on Consumer Price Index estimated increases of 2.0%.
Correctional Impact
Senate File 574 creates a new criminal offense, and the correctional impact cannot be estimated due to a lack of existing conviction data. Figure 1 shows estimates for sentencing to State prison, parole, probation, or community-based corrections (CBC) residential facilities; LOS in months under those supervisions; and supervision marginal costs per day for aggravated misdemeanors. Refer to the Legislative Services Agency (LSA) memo addressed to the General Assembly, Cost Estimates Used for Correctional Impact Statements, dated January 16, 2024, for information related to the correctional system.
Figure 1 — Sentencing Estimate and LOS
Minority Impact
Senate File 574 creates a new criminal offense. As a result, Criminal and Juvenile Justice Planning (CJJP) of the Department of Management (DOM) cannot use existing data to estimate the minority impact of the Bill. Refer to the LSA memo addressed to the General Assembly, Minority Impact Statement, dated January 16, 2024, for information related to minorities in the criminal justice system.
Fiscal Impact
The Bill is estimated to reduce General Fund revenue by $18.2 million in FY 2028 to $18.9 million per project per year in FY 2032 when fully phased in. The fiscal impact of the property tax exemption will be borne by the local government authority and is unknown. Figure 2 shows the estimated fiscal impact of the Program for one project over the five-year period. Figure 2 — MEGA Program Award Fiscal Impact Per Project (in Millions) *Qualifying Investment Tax Credit = 5.0% of $1.000 billion investment, claimed over five years. **Sales Tax Refund = 6.0% of 25.0% of the $1.000 billion investment, claimed over five years. ***Withholding Tax Refund = 3.0% of withholding, claimed over five years.Qualifying
Investment Sales Withholding Total Tax
Tax Credit* Tax Refund** Tax Refund*** Credits/Refunds Award in FY 2025 50.0$ 15.0$ 27.7$ 92.7$
Claims by Year
FY 2026 0.0$ 0.0$ 0.0$ 0.0$ FY 2027 0.0 0.0 0.0 0.0 FY 2028 10.0 3.0 5.2 18.2 FY 2029 10.0 3.0 5.4 18.4 FY 2030 10.0 3.0 5.5 18.5 FY 2031 10.0 3.0 5.7 18.7 FY 2032 10.0 3.0 5.9 18.9Conviction Offense Class
Percent
Ordered to
State Prison
FY 2023 Avg
LOS in
Prison (All Releases)
Marginal
Prison
Cost Per
Day
Percent
Ordered to
Probation
FY23 Field
Avg LOS on
Probation
Avg Cost
Per Day on
Probation
Percent
Sentenced
to CBC
Residential
Facility
Marginal
Cost CBC
Per Day
Percent
Ordered to
County Jail
Marginal
Cost Per
Day Jail
FY 23
Field Avg
LOS on
Parole
Marginal
Cost Per
Day
Parole
Aggravated Misdemeanor (Non-Persons) 30.4% 7.5 24.94$ 45.0% 25.1 7.67$ 3.6% 20.00$ 71.7% $50.00 11.9 7.67$
Sources
- Iowa Department of Revenue
- Iowa Economic Development Authority
- Legislative Services Agency
- Final Fiscal Note — Economic Development Authority, Major Economic Growth Attraction Program · 26 de abril de 2024
- Economic Development Authority, Major Economic Growth Attraction Program · 14 de marzo de 2024
- Economic Development Authority, Major Economic Growth Attraction Program · 25 de abril de 2023
- Economic Development Authority, Major Economic Growth Attraction Program · 30 de marzo de 2023
Lo que cambia del Código de Iowa (Iowa Code)
Crea§15.281§15.282§15.283§15.284§15.285§15.286§15.286A§15.286B§15.287§15.288§15.289
Modifica§9I.3
Cabildeo
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90th General Assembly