The proposed bill establishes the Iowa Rural Development Tax Credit Program, designed to encourage capital contributions to certified rural business growth funds for investment in qualified businesses. It introduces new definitions, including what constitutes a "credit-eligible capital contribution," which can be an equity interest or a debt instrument in a growth fund. The bill outlines the application process for these funds, detailing documentation requirements, revenue impact assessments, and setting a cap of $45 million on eligible investment authority and $27 million on credit-eligible capital contributions. Applications will be accepted starting January 7, 2026, on a first-come, first-served basis.

Furthermore, the bill specifies the process for issuing tax credits to investors, equating the credit to the investor's capital contribution, which can be claimed against various state taxes. It includes provisions for revocation and recapture of tax credits if growth funds do not meet investment requirements within specified timeframes. The bill emphasizes job creation and retention as key goals, requiring growth funds to submit annual reports detailing financial statements, compliance, and job metrics. It also establishes penalties for non-compliance and clarifies that tax credits are non-refundable and non-transferable, except to affiliates. The authority is tasked with adopting rules to effectively implement and administer the program.

Statutes affected:
Introduced: 15.512, 15.513