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 such as "credit-eligible capital contribution," "qualified business," and "rural business growth fund," and outlines the application process for entities seeking certification. The economic development authority will begin accepting applications on January 7, 2026, reviewing them on a first-come, first-served basis, with a cap of $45 million in eligible investment authority and $27 million in credit-eligible capital contributions. Applicants must provide necessary documentation, including a revenue impact assessment and a nonrefundable application fee.

Additionally, the bill details the issuance of non-refundable tax credit certificates to investors, the conditions for revocation or recapture of these credits, and the annual reporting requirements for growth funds. It mandates that growth funds submit reports including financial statements and job creation data, and allows the authority to notify funds of any issues before revoking credits, providing a 90-day resolution period. The bill also specifies that investments in publicly traded securities are exempt from certain restrictions and establishes a process for growth funds to exit the program after five years, contingent on compliance with investment requirements. Overall, the legislation aims to stimulate economic growth in rural areas while ensuring accountability and compliance with program standards.

Statutes affected:
Introduced: 15.512, 15.513