Bill Text: IA SF574 | 2023-2024 | 90th General Assembly | Enrolled

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Bill Title: A bill for an act relating to programs administered by the economic development authority by establishing the economic growth attraction program, modifying the certified site and high-quality jobs programs, making appropriations, providing penalties, and including effective date provisions. (Formerly SSB 1162.) Effective date: 05/10/2024.

Spectrum: Committee Bill

Status: (Passed) 2024-05-10 - Correction approved. S.J. 962. [SF574 Detail]

Download: Iowa-2023-SF574-Enrolled.html

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Senate File 574 - Enrolled
Senate File 574
AN ACT
RELATING TO PROGRAMS ADMINISTERED BY THE ECONOMIC DEVELOPMENT
AUTHORITY BY ESTABLISHING THE ECONOMIC GROWTH ATTRACTION
PROGRAM, MODIFYING THE CERTIFIED SITE AND HIGH-QUALITY JOBS
PROGRAMS, MAKING APPROPRIATIONS, PROVIDING PENALTIES, AND
INCLUDING EFFECTIVE DATE PROVISIONS.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
DIVISION I
MAJOR ECONOMIC GROWTH ATTRACTION PROGRAM
Section 1. Section 9I.3, subsection 3, Code 2024, is amended
by adding the following new paragraph:
NEW PARAGRAPH . f. An interest in agricultural land acquired
by a foreign business for an immediate use other than farming if
all of the requirements of section 15.498 are met.
Sec. 2. NEW SECTION . 15.490 Short title.
This part shall be known and may be cited as the “Major
Economic Growth Attraction Program” or “MEGA Program” .
Sec. 3. NEW SECTION . 15.491 Definitions.
As used in this part, unless the context otherwise requires:
1. “Actively engaged in farming” means any of the following:
a. Performing physical work which significantly contributes
to crop or livestock production.
b. Making or taking part in making decisions contributing to
or affecting the success of a farm’s operations.
c. Entering into a contractual relationship with an
outside entity to farm agricultural land as part of a farm’s

Senate File 574, p. 2
operations.
1A. “Agricultural land” means the same as defined in section
91.1.
2. “Base employment level” means the number of full-time
equivalent positions at a business, as established by the
authority and the business using the business’s payroll
records, as of the date the business applies for tax incentives
under the program.
3. “Benefit” means nonwage compensation provided to an
employee. “Benefits” include medical and dental insurance, a
pension, a retirement plan, a profit-sharing plan, child care,
life insurance, vision insurance, and disability insurance.
4. “Certified site” means a site that has been issued a
certificate of readiness by the authority pursuant to section
15E.18.
5. “Community” means a city, county, or entity established
pursuant to chapter 28E.
6. “Contract completion” means the date of completion of
the terms of a contract between a contractor and an eligible
business.
7. “Contractor” means a person that has executed a contract
with an eligible business for the provision of property,
materials, or services for the construction or equipping of a
facility that is part of the eligible business’s project.
8. “Created jobs” or “create jobs” means new, permanent,
full-time equivalent positions added to an eligible business’s
payroll, at the location of the eligible business’s project, in
excess of the eligible business’s base employment level.
9. “Data center business” means the same as defined in
section 423.3, subsection 95.
10. “Eligible business” means a business that meets the
requirements of section 15.492.
10A. “Foreign adversary” means a foreign government or
foreign non-government person as determined in 15 C.F.R. §7.4,
and that is listed in 15 C.F.R. §7.4(a) at any time from March
4, 2024, through the termination of the program.
10B. “Foreign adversary entity” means any of the following:
a. A foreign business subject to the jurisdiction of or
organized under the laws of a foreign adversary.

Senate File 574, p. 3
b. A foreign business owned, directed, or controlled by a
foreign adversary.
11. “Foreign business” means the same as defined in section
9I.1.
12. “Full-time equivalent position” means a non-part-time
position for the number of hours or days per week considered
to be full-time work for the kind of service or work performed
for an employer. Typically, a “full-time equivalent position”
requires two thousand eighty hours of work in a calendar year,
including all paid holidays, vacations, sick time, and other
paid leave.
13. “Maintenance period” means the period of time between
the project completion date and the maintenance period
completion date during which an eligible business must maintain
all created jobs per the agreement under section 15.494.
14. “Maintenance period completion date” means the date on
which the maintenance period ends.
15. “Mega site” means a certified site greater than one
thousand acres.
16. “Program” means the major economic growth attraction
program.
17. “Project” means an activity or set of activities
directly related to the start-up or location of an eligible
business, proposed in an eligible business’s application to the
program, that will accomplish the goals of the program.
18. “Project completion date” means the date by which an
eligible business that has been approved by the authority to
participate in the program agrees to complete the terms and
conditions of the agreement under section 15.494.
19. “Project completion period” means the period of time
between the date the authority approves an eligible business to
participate in the program and the project completion date.
20. “Qualifying investment” means a capital investment in
real property, including the purchase price of the land, site
preparation, infrastructure, and building construction for
use in the operation of an eligible business. “Qualifying
investment” also means a capital investment in depreciable
assets for use in the operation of an eligible business.
21. “Qualifying wage threshold” means the mean wage level

Senate File 574, p. 4
represented by the wages within two standard deviations of
the mean wage within the laborshed area in which the eligible
business is located, as calculated by the authority by rule,
using the most current covered wage and employment data
available from the department of workforce development for the
laborshed area in which the eligible business is located.
22. “Subcontractor” means a person that contracts with
a contractor for the provision of property, materials, or
services for the construction or equipping of a facility that
is part of an eligible business’s project.
23. “Tax incentives” means tax credits, tax refunds, or tax
exemptions authorized under the program by the authority for an
eligible business.
Sec. 4. NEW SECTION . 15.492 Eligible business.
1. To be eligible to receive tax incentives under
the program, a business must meet all of the following
requirements:
a. The business’s proposed project must be located on a site
where the business has a controlling interest in or a certified
site greater than two hundred fifty acres. The authority must
determine a site is suitable for the project.
b. The business’s qualifying investment in the proposed
project must exceed one billion dollars.
c. The community in which the proposed project is located
must approve the project either by ordinance or resolution.
d. (1) The business must be primarily engaged in advanced
manufacturing, biosciences, or research and development.
The business shall not be a data center business, a retail
business, or a business where a cover charge or membership
requirement restricts certain individuals from entering the
business.
(2) Factors the authority shall consider to determine if
a business is primarily engaged in advanced manufacturing,
biosciences, or research and development shall include but are
not limited to all of the following:
(a) The business’s North American industry classification
system code.
(b) The business’s main sources of revenue.
(c) The business’s customer base.

Senate File 574, p. 5
e. (1) The business must not be solely relocating
operations from one area of the state to another area of
the state. A proposed project that does not create jobs or
involve a substantial amount of new capital investment shall
be presumed to be a relocation of operations. For purposes of
this subparagraph, the authority shall consider a letter from
the affected local community’s government officials supporting
the business’s move away from the affected local community
in making a determination whether the business is solely
relocating operations.
(2) This paragraph shall not be construed to prohibit
a business from expanding the business’s operations in a
community if the business has similar operations in this state
that are not closing or undergoing a substantial reduction in
operations.
f. The business must create jobs as part of the business’s
proposed project. The business must demonstrate that the
created jobs will pay at least one hundred forty percent of the
qualifying wage threshold by the project completion date, and
through the maintenance period completion date.
g. The business must provide comprehensive benefits to
each employee employed in a created job. The authority may
adopt rules under chapter 17A to determine the requirements for
comprehensive benefits.
h. (1) The business must not have a record of violations
of the law or of regulations, including but not limited to
antitrust, environmental, trade, or worker safety, that over
a period of time show a consistent pattern or that establish
the business’s intentional, criminal, or reckless conduct in
violation of such laws or regulations.
(2) If the authority determines that the business has a
record of violations described in subparagraph (1), and the
authority finds that the violations did not seriously affect
public health, public safety, or the environment, the business
may be eligible to qualify for the program.
(3) If the authority determines that the business has
a record of violations described in subparagraph (1), and
the authority finds that there were mitigating circumstances
related to the violations, the business may be eligible to

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qualify for the program.
(4) In making determinations and findings under
subparagraphs (2) and (3), and making a determination whether a
business is disqualified from the program, the authority shall
be exempt from chapter 17A.
2. a. 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 all of the
following:
(1) The quality of the business’s proposed project’s
created jobs. The authority shall place greater emphasis on
created jobs that are high wage, low turnover, that provide
comprehensive benefits, and that expose employees to minimal
occupational hazards. A business that pays wages substantially
below that of similar businesses located in the same geographic
area shall not be given priority under the program.
(2) The impact of the business’s proposed project on
businesses that are in competition with the business.
The authority shall make a good-faith effort to identify
existing Iowa businesses in competition with the business
being considered for the program. The authority shall make
a good-faith effort to determine the probability that any
proposed tax incentives will displace employees of the
competing businesses. In determining the impact on the
competing businesses, created jobs resulting from employees
being displaced from the competing businesses shall not be
counted as created jobs for the applying business’s project.
(3) The business’s proposed project’s economic impact
on the state. The authority shall place greater emphasis
on businesses and proposed projects that meet the following
requirements:
(a) The business has a high proportion of in-state
suppliers.
(b) The proposed project will diversify the state economy.
(c) The business has few in-state competitors.
(d) The proposed project has the potential to create jobs on
an ongoing basis.
(e) Any other factors the authority deems relevant in
determining the economic impact of a proposed project.

Senate File 574, p. 7
Sec. 5. NEW SECTION . 15.493 Applications —— authorization
of tax credits and exemptions.
1. Applications for the program shall be submitted to the
authority in the form and manner prescribed by the authority by
rule. Each application must be accompanied by an application
fee in an amount determined by the authority by rule.
2. In determining the eligibility of a business to
participate in the program, the authority may engage outside
experts to complete a technical, financial, or other review
of an application submitted by a business if such review is
outside the expertise of the authority.
3. a. The authority and the board may negotiate with an
eligible business regarding the terms of, and the aggregate
value of, the tax incentives the eligible business may receive
under the program.
b. The board may authorize any combination of tax incentives
available under the program for an eligible business.
4. The board may authorize an exemption to restrictions
on agricultural land holdings if all of the requirements of
section 15.498 are met.
Sec. 6. NEW SECTION . 15.494 Agreement.
1. An eligible business that is approved by the authority to
participate in the program shall enter into an agreement with
the authority that specifies the criteria for the successful
completion of all requirements of the program. The agreement
must contain, at a minimum, provisions related to all of the
following:
a. The eligible business must certify to the authority
annually that the business is in compliance with the agreement.
b. If the eligible business fails to comply with any
requirements of the program or the agreement, the eligible
business may be required to repay any tax incentives the
authority issued to the eligible business. A required
repayment of a tax incentive shall be considered a tax payment
due and payable to the department of revenue by any taxpayer
that claimed the tax incentive, and the failure to make the
repayment may be treated by the department of revenue in the
same manner as a failure to pay the tax shown due, or required
to be shown due, with the filing of a return or deposit form.

Senate File 574, p. 8
c. If the eligible business undergoes a layoff or
permanently closes any of its facilities within the state, the
eligible business may be subject to all of the following:
(1) A reduction or elimination of some or all of the tax
incentives the authority issued to the eligible business.
(2) Repayment of any tax incentives that the business
has claimed, and payment of any penalties assessed by the
department of revenue.
d. The project completion date, the maintenance period
completion date, the required number of created jobs, the
qualifying wage threshold that is applicable to the project,
the amount of qualifying investment, the maximum aggregate
value of the tax incentives authorized by the board, and any
other terms and obligations the authority deems necessary.
e. The eligible business shall only employ individuals
legally authorized to work in this state. If the eligible
business is found to knowingly employ individuals who are
not legally authorized to work in this state, in addition
to any penalties provided by law, all or a portion of any
tax incentives issued by the authority shall be subject to
recapture by the authority or the department of revenue.
f. The maximum amount of gross wages, not to exceed three
percent, that the eligible business may withhold under section
15.497, and the time period, not to exceed the term of the
agreement, during which the specified amount of gross wages may
be withheld.
g. Any terms deemed necessary by the authority to effect the
eligible business’s ongoing compliance with section 15.492.
2. 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 terms of the agreement to allow an increase in
the maximum aggregate value of the tax incentives authorized by
the board under section 15.493, subsection 3.
3. The eligible business shall comply with all applicable
terms of the agreement during the maintenance period.
4. The eligible business shall not assign the agreement
to another entity without the advance written approval of the

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board.
5. The authority may enforce the terms of the agreement as
necessary and appropriate.
Sec. 7. NEW SECTION . 15.495 Sales and use tax refund.
1. An eligible business that has been issued a tax incentive
certificate under the program shall be entitled to a refund
of the sales and use taxes paid under 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 a written contract for 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.
2. To receive the sales and use tax refund, the eligible
business shall file a claim with the department of revenue as
follows:
a. The contractor or subcontractor shall state under oath,
on forms provided by the department of revenue, the amount of
the sales of tangible personal property or services rendered,
furnished, or performed including water, sewer, gas, and
electric utility services upon which sales or use tax has been
paid prior to contract completion, and shall submit the forms
to the eligible business before contract completion.
b. The eligible business shall inform the department of
revenue in writing of contract completion. The eligible
business shall, after contract completion, submit an
application to the department of revenue for a refund of the
amount of the sales and use taxes paid pursuant to chapter 423
upon any tangible personal property, or services rendered,
furnished, or performed, including water, sewer, gas, and
electric utility services. The application shall be submitted
in the form and manner prescribed by the department of revenue.
The department of revenue shall audit the application and,
if approved, issue a warrant or warrants to the eligible
business in the amount of the sales or use tax which has been
paid to the state of Iowa under subsection 1. The eligible
business’s application must be submitted to the department of
revenue within one year after the project completion date. An

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application filed by the eligible business in accordance with
this section shall not be denied by reason of a limitation set
forth in chapter 421 or 423.
c. The refund shall be remitted by the department of revenue
to the eligible business equally over five tax years. Interest
shall not accrue on any part of the refund that has not yet been
remitted by the department of revenue to the eligible business.
3. A contractor or subcontractor that willfully makes a
false report of tax paid under this section is guilty of an
aggravated misdemeanor, and shall be liable for payment of the
tax and any applicable penalty and interest.
Sec. 8. NEW SECTION . 15.496 Qualifying investment tax
credit.
1. The authority may authorize a tax credit for an
eligible business that is up to five percent of the eligible
business’s qualifying investment. The authority shall not
issue a tax credit certificate to the eligible business until
the eligible business’s project has been placed in service,
and at least fifty percent of the created jobs the eligible
business agreed to in the agreement under section 15.494, and
that pay at least one hundred forty percent of the qualifying
wage threshold, have been added to the eligible business’s
payroll. The department of revenue shall remit the tax credit
to the eligible business equally over five tax years. The tax
credit shall be allowed against taxes imposed under chapter
422, subchapter II, III, or V, and against the moneys and
credits tax imposed in section 533.329. If the eligible
business is a partnership, S corporation, limited liability
company, cooperative organized under chapter 501 and filing
as a partnership for federal tax purposes, or estate or trust
electing to have the income taxed directly to the individual,
an individual may claim the tax credit allowed. The amount
claimed by the individual shall be based upon the pro rata
share of the individual’s earnings of the partnership, S
corporation, limited liability company, cooperative organized
under chapter 501 and filing as a partnership for federal tax
purposes, or estate or trust. 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

Senate File 574, p. 11
the eligible business’s tax liability in any of the following
five consecutive tax years or until depleted, whichever occurs
first. The eligible business shall make such election prior to
the authority issuing a tax credit certificate to the eligible
business, and the eligible business’s election shall be noted
on the tax credit certificate. 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.
2. If within five years of the date the authority issues
an eligible business a tax credit under subsection 1, 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 under
this section, 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 one of the following
amounts:
a. One hundred percent of the tax credit claimed under
this section if all or a part of the land, buildings, or other
structures for which the tax credit was claimed under this
section cease to be eligible for the tax credit within one
year after the date the authority issued the tax credit to the
eligible business.
b. Eighty percent of the tax credit claimed under this
section if all or a part of the land, buildings, or other
structures for which the tax credit was claimed under this
section cease to be eligible for the tax credit within two
years after the date the authority issued the tax credit to the
eligible business.
c. Sixty percent of the tax credit claimed under this
section if all or a part of the land, buildings, or other
structures for which the tax credit was claimed under this
section cease to be eligible for the tax credit within three
years after the date the authority issued the tax credit to the
eligible business.
d. Forty percent of the tax credit claimed under this
section if all or a part of the land, buildings, or other
structures for which the tax credit was claimed under this

Senate File 574, p. 12
section cease to be eligible for the tax credit within four
years after the date the authority issued the tax credit to the
eligible business.
e. Twenty percent of the tax credit claimed under this
section if all or a part of the land, buildings, or other
structures for which the tax credit was claimed under this
section cease to be eligible for the tax credit within five
years after the date the authority issued the tax credit to the
eligible business.
Sec. 9. NEW SECTION . 15.497 Withholding tax credit.
1. From the remittance due to the department of revenue
pursuant to section 422.16, an eligible business may withhold
an amount, pursuant to section 15.494, subsection 1, paragraph
“f” , of the gross wages paid to each employee in a created job
that pays at least the qualifying wage threshold pursuant to
the agreement under section 15.494.
2. If the amount withheld under subsection 1 is less than
three percent of the gross wages paid to each employee in a
created job that pays at least one hundred forty percent of
the qualifying wage threshold, the eligible business shall
receive a credit against the remaining withholding taxes due
from the eligible business, or the eligible business may carry
the credit forward up to five consecutive tax years or until
depleted, whichever is earlier.
3. In any tax year, the aggregate amount of withholding tax
credit under this section and under any other program for which
an eligible business is receiving a withholding tax credit
shall not exceed the amount the eligible business is required
to deduct and remit to the department of revenue under section
422.16 for that tax year.
Sec. 10. NEW SECTION . 15.498 Foreign businesses ——
acquisition of agricultural land.
1. The board may authorize an exemption to restrictions on
agricultural land holdings for a foreign business if all of the
following requirements are satisfied:
a. The foreign business qualifies as an eligible business
pursuant to section 15.492.
b. As part of the application of the foreign business under
section 15.493, the foreign business provides documentation

Senate File 574, p. 13
to the authority, as deemed necessary by the authority, to
establish that the foreign business is not associated with a
foreign adversary or foreign adversary entity.
c. The agricultural land for which the exemption is provided
is a mega site or included in a mega site.
d. The foreign business is not actively engaged in farming.
2. a. A foreign business under subsection 1 that is
approved by the authority to participate in the program shall
enter into an agreement with the authority pursuant to section
15.494. The agreement shall include a provision that requires
the foreign business to comply with chapter 9I, and specifies
that failure to do so may result in revocation of all tax
incentives issued by the authority to the foreign business.
b. The authority may grant the foreign business one or
more one-year extensions in which the foreign business must
comply with section 9I.4. The authority shall not grant
more than five one-year extensions. The community in which
the agricultural land is located must approve each one-year
extension by ordinance or resolution prior to the authority
granting each extension. The foreign business shall comply
with the remaining provisions of chapter 9I to the extent the
provisions do not conflict with this section.
Sec. 11. NEW SECTION . 15.499 Other incentives.
1. Except for the high quality jobs program administered
by the authority pursuant to sections 15.326 through 15.336,
and the targeted jobs withholding credit pursuant to section
403.19A, an eligible business may apply for and be eligible to
receive other federal, state, and local incentives in addition
to the tax incentives issued by the authority to the eligible
business under the program.
2. The authority, in its discretion, may prohibit an
eligible business that has been issued tax 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.
Sec. 12. NEW SECTION . 15.500 Property tax exemption.
1. 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

Senate File 574, p. 14
improvements to real property directly related to the eligible
business’s created jobs. The community may allow a property
tax exemption for a period not to exceed twenty years beginning
the year that the improvements to real property are first
assessed for taxation.
2. For purposes of this section, “improvements” means new
construction, and rehabilitation of and additions to existing
structures.
3. A property tax exemption granted under subsection 1 shall
apply to all taxing districts, except for school districts, in
which the real property is located.
Sec. 13. NEW SECTION . 15.501 Restrictions on board.
The board shall not authorize tax incentives available under
the program, or an exemption to restrictions on agricultural
land holdings pursuant to this part, for more than two eligible
businesses, or on or after January 1, 2027, whichever occurs
first.
DIVISION II
CERTIFIED SITE AND HIGH-QUALITY JOBS PROGRAMS —— APPROPRIATION
Sec. 14. 2023 Iowa Acts, chapter 110, section 15, subsection
1, paragraph a, subparagraph (1), is amended to read as
follows:
(1) For the purposes of providing assistance as described in
section 15.335B for the high quality jobs program:
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 11,700,000
(a) From the moneys appropriated in this subparagraph, the
economic development authority may use not more than $1,000,000
for purposes of providing infrastructure grants to main street
communities under the main street Iowa program and may allocate
not more than $300,000 for the purposes of supporting statewide
worker education and quality preapprenticeship programs.
(b) Notwithstanding section 15.335B, subsection 2, from the
moneys appropriated in this subparagraph, $300,000 is allocated
to the economic development authority for certification
costs associated with the authority’s certified site program.
Moneys allocated in this subparagraph division must be used to
certify sites in counties with a population of less than 50,000
according to the 2020 federal decennial census and to certify
at least two sites in each congressional district.

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Sec. 15. EFFECTIVE DATE. This division of this Act, being
deemed of immediate importance, takes effect upon enactment.
______________________________ ______________________________
AMY SINCLAIR PAT GRASSLEY
President of the Senate Speaker of the House
I hereby certify that this bill originated in the Senate and
is known as Senate File 574, Ninetieth General Assembly.
______________________________
W. CHARLES SMITHSON
Secretary of the Senate
Approved _______________, 2024 ______________________________
KIM REYNOLDS
Governor