House File 789 - Introduced
HOUSE FILE 789
BY COMMITTEE ON ECONOMIC
GROWTH
(SUCCESSOR TO HSB 233)
A BILL FOR
1 An Act relating to matters under the purview of the economic
2 development authority, including tax credit programs,
3 statewide tourism, incentives for manufacturers to invest in
4 smart technologies, and an energy infrastructure revolving
5 loan program, and making appropriations.
6 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
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1 DIVISION I
2 HIGH QUALITY JOBS AND OTHER TAX CREDITS
3 Section 1. Section 15.119, subsection 2, paragraph a,
4 subparagraph (3), subparagraph division (a), Code 2021, is
5 amended to read as follows:
6 (a) In allocating tax credits pursuant to this subsection
7 for the fiscal year beginning July 1, 2021, and ending June 30,
8 2022, the authority shall not allocate more than one hundred
9 five eighty million dollars for purposes of this paragraph
10 if the aggregate amount of renewable chemical production tax
11 credits under section 15.319 that were awarded on or after
12 July 1, 2018, but before July 1, 2021, equals or exceeds
13 twenty-seven million dollars.
14 Sec. 2. Section 15.119, subsection 2, paragraph h, Code
15 2021, is amended to read as follows:
16 h. The renewable chemical production tax credit program
17 administered pursuant to sections 15.315 through 15.322. In
18 allocating tax credits pursuant to this subsection for the
19 fiscal year beginning July 1, 2021, and for each fiscal year
20 thereafter, the authority shall not allocate more than ten five
21 million dollars for purposes of this paragraph. This paragraph
22 is repealed July 1, 2030.
23 DIVISION II
24 STATEWIDE TOURISM MARKETING CAMPAIGN FUNDING
25 Sec. 3. Section 123.17, Code 2021, is amended by adding the
26 following new subsection:
27 NEW SUBSECTION. 6A. After any transfers provided for
28 in subsections 3, 5, and 6, the department of commerce shall
29 transfer to the economic development authority from the beer
30 and liquor control fund and before any other transfer to the
31 general fund, an amount not to exceed five million dollars
32 annually for a statewide tourism marketing campaign under
33 section 15.108, subsection 5.
34 DIVISION III
35 MANUFACTURING 4.0
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1 Sec. 4. NEW SECTION. 15.371 Manufacturing 4.0 technology
2 investment program.
3 1. This section shall be known as and may be cited as the
4 “Manufacturing 4.0 Technology Investment Program”.
5 2. For purposes of this section unless the context otherwise
6 requires:
7 a. “Financial assistance” means the same as defined in
8 section 15.102.
9 b. “Manufacturing 4.0 technology investments” means projects
10 that are intended to lead to the adoption of, and integration
11 of, smart technologies into existing manufacturing operations
12 located in the state by mitigating the risk to the manufacturer
13 of significant technology investments.
14 3. a. A manufacturing 4.0 technology investment fund
15 is created within the state treasury under the control of
16 the authority for the purpose of financing manufacturing 4.0
17 technology investments as described in this section.
18 b. The fund may be administered as a revolving fund and
19 may consist of any moneys appropriated by the general assembly
20 for purposes of this section and any other moneys that are
21 lawfully available to the authority. Any moneys appropriated
22 to the fund shall be used for purposes of the manufacturing
23 4.0 technology investment program. The authority may use all
24 other moneys in the fund, including interest, earnings, and
25 recaptures, for purposes of this section.
26 c. Notwithstanding section 8.33, moneys appropriated in this
27 section that remain unencumbered or unobligated at the close of
28 the fiscal year shall not revert but shall remain available for
29 expenditure for the purposes designated until the close of the
30 succeeding fiscal year.
31 d. Notwithstanding any law to the contrary, the authority
32 may transfer any unobligated and unencumbered moneys in the
33 fund, except for moneys appropriated for purposes of this
34 section, to any fund created pursuant to section 15.106A,
35 subsection 1, paragraph “o”.
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1 4. The authority shall establish and administer a
2 manufacturing 4.0 technology investment program and shall use
3 moneys in the fund to award financial assistance to eligible
4 manufacturers for manufacturing 4.0 technology investments.
5 5. The authority shall establish by rule a manufacturing
6 4.0 review committee that shall review each application
7 received by the authority for the program, and that shall make
8 recommendations to the board regarding all of the following:
9 a. The completeness of the application.
10 b. Whether the board should approve or deny an application.
11 c. If an application is approved, the type and amount of
12 financial assistance to be awarded to the applicant.
13 6. The authority shall adopt rules pursuant to chapter 17A
14 necessary to implement and administer this section.
15 Sec. 5. NEW SECTION. 15.372 Additional first-year
16 depreciation.
17 1. Overview. The authority may approve a manufacturing
18 business located in this state to claim additional first-year
19 depreciation for certain investments made by the business to
20 transition to a smart manufacturing environment that leverages
21 joint capabilities of hardware, software, and workers in an
22 integrated way.
23 2. Eligibility. To claim additional first-year
24 depreciation, a business must make an eligible investment.
25 For purposes of this section, “eligible investment” means
26 an investment in smart manufacturing equipment that is
27 digitized and interconnected, and that modernizes a business’s
28 operations by supporting interconnectivity, decision support,
29 customization, and flexibility of production runs, or that
30 decentralizes low-level decision making.
31 3. Application and agreement.
32 a. A business seeking approval to claim additional
33 first-year depreciation for an eligible investment shall make
34 application to the authority in the manner prescribed by the
35 authority by rule. The application must include all of the
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1 following:
2 (1) A description of the investment the business proposes
3 to make and a statement describing how the investment will
4 transition the business to a smart manufacturing environment.
5 (2) The projected amount of the eligible investment.
6 (3) The projected date that the eligible investment will be
7 placed-in-service.
8 b. Completed applications shall be reviewed pursuant to
9 rules adopted by the authority. Upon review of an application,
10 the board shall determine if the proposed investment is an
11 eligible investment and shall determine the maximum amount of
12 the eligible investment the business is eligible to claim for
13 additional first-year depreciation.
14 c. If an application is approved the authority shall notify
15 the business. The notification shall include the maximum
16 amount of the eligible investment the business is eligible to
17 claim for additional first-year depreciation after all terms
18 and conditions imposed by the agreement entered into pursuant
19 to paragraph “d” have been satisfied.
20 d. After receipt of the notification under paragraph “c”,
21 the business shall enter into an agreement with the authority
22 that specifies the terms and conditions that must be satisfied
23 for the business to claim additional first-year depreciation
24 on its eligible investment. The agreement must include all of
25 the following:
26 (1) A description of the business’s eligible investment.
27 (2) The maximum amount of the eligible investment the
28 business is allowed to claim for additional first-year
29 depreciation.
30 (3) The projected placed-in-service date for the business’s
31 eligible investment.
32 (4) The date by which the business must file a written
33 report with the authority that provides all of the following:
34 (a) The actual date of completion of the business’s eligible
35 investment.
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1 (b) The actual dollar amount of the business’s eligible
2 investment.
3 (c) The actual placed-in-service date for the business’s
4 eligible investment.
5 e. Upon review of the report submitted under paragraph “d”,
6 subparagraph (4), and verification by the authority of the
7 actual dollar amount of the business’s eligible investment, the
8 authority shall notify the business of the amount of eligible
9 investment the business may claim as additional first-year
10 depreciation. The authority shall notify the department of
11 revenue of the amount of eligible investment the business may
12 claim as additional first-year depreciation and shall submit a
13 list to the department of the assets deemed to be part of the
14 business’s eligible investment.
15 4. Benefit. Notwithstanding section 422.7, subsection
16 39 or 39A, or section 422.35, subsection 19 or 19A, for a
17 business that is approved by the authority for an eligible
18 investment, section 168(k) of the Internal Revenue Code applies
19 for the computing of net income of the business for state tax
20 purposes up to the amount of eligible investment approved by
21 the authority.
22 5. Compliance. If a business fails to complete the
23 installation of its eligible investment or fails to comply with
24 terms and conditions of the agreement entered under subsection
25 3, paragraph “d”, the authority shall revoke, reduce,
26 terminate, or rescind the additional first-year depreciation
27 the business may claim. If a business has already filed a
28 tax return in which the business computed its net income by
29 applying section 168(k) of the Internal Revenue Code, the
30 business shall file an amended return with the department of
31 revenue without applying section 168(k).
32 6. Rules. The authority and the department of revenue
33 shall adopt rules as necessary for the implementation and
34 administration of this section.
35 DIVISION IV
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1 ENERGY INFRASTRUCTURE REVOLVING LOAN PROGRAM
2 Sec. 6. Section 476.10A, subsection 2, Code 2021, is amended
3 to read as follows:
4 2. Notwithstanding section 8.33, any unexpended moneys
5 remitted to the treasurer of state under this section shall be
6 retained for the purposes designated. Notwithstanding section
7 12C.7, subsection 2, interest or earnings on investments or
8 time deposits of the moneys remitted under this section shall
9 be retained and used for the purposes designated, pursuant to
10 section 476.46.
11 Sec. 7. Section 476.46, subsection 2, paragraph e,
12 subparagraph (3), Code 2021, is amended to read as follows:
13 (3) Interest on the fund shall be deposited in the fund.
14 A portion of the interest on the fund, not to exceed fifty
15 percent of the total interest accrued, shall be used for
16 promotion and administration of the fund.
17 Sec. 8. Section 476.46, Code 2021, is amended by adding the
18 following new subsections:
19 NEW SUBSECTION. 3. The Iowa energy center shall not
20 initiate any new loans under this section after June 30, 2021.
21 NEW SUBSECTION. 4. Loan payments received under this
22 section on or after July 1, 2021, and any other moneys in the
23 fund on or after July 1, 2021, shall be deposited in the energy
24 infrastructure revolving loan fund created in section 476.46A.
25 Sec. 9. NEW SECTION. 476.46A Energy infrastructure
26 revolving loan program.
27 1. a. An energy infrastructure revolving loan fund is
28 created in the office of the treasurer of state and shall be
29 administered by the Iowa energy center established in section
30 15.120.
31 b. The fund may be administered as a revolving fund and may
32 consist of any moneys appropriated by the general assembly for
33 purposes of this section and any other moneys that are lawfully
34 directed to the fund.
35 c. Moneys in the fund shall be used to provide financial
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1 assistance for the development and construction of energy
2 infrastructure, including projects that support electric or gas
3 generation transmission, storage, or distribution; electric
4 grid modernization; energy-sector workforce development;
5 emergency preparedness for rural and underserved areas; the
6 expansion of biomass, biogas, and renewable natural gas;
7 innovative technologies; and the development of infrastructure
8 for alternative fuel vehicles.
9 d. Notwithstanding section 8.33, moneys appropriated in this
10 section that remain unencumbered or unobligated at the close of
11 the fiscal year shall not revert but shall remain available for
12 expenditure for the purposes designated until the close of the
13 succeeding fiscal year.
14 e. Notwithstanding section 12C.7, subsection 2, interest
15 or earnings on moneys in the fund shall be credited to the
16 fund. A percentage of the total interest credited to the fund,
17 not to exceed fifty percent, shall be used for promotion of
18 the energy infrastructure revolving loan program and for the
19 administration of the fund.
20 2. a. The Iowa energy center shall establish and administer
21 an energy infrastructure revolving loan program to encourage
22 the development of energy infrastructure within the state.
23 b. An individual, business, rural electric cooperative, or
24 municipal utility located and operating in this state shall be
25 eligible for financial assistance under the program. With the
26 approval of the Iowa energy center governing board established
27 under section 15.120, subsection 2, the economic development
28 authority shall determine the amount and the terms of all
29 financial assistance awarded to an individual, business, rural
30 electric cooperative, or municipal utility under the program.
31 All agreements and administrative authority sha11 be vested in
32 the Iowa energy center governing board.
33 c. The economic development authority may use not more than
34 five percent of the moneys in the fund at the beginning of each
35 fiscal year for purposes of administrative costs, marketing,
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1 technical assistance, and other program support.
2 3. For the purposes of this section:
3 a. “Energy infrastructure” means land, buildings, physical
4 plant and equipment, and services directly related to the
5 development of projects used for, or useful for, electricity or
6 gas generation, transmission, storage, or distribution.
7 b. “Financial assistance” means the same as defined in
8 section 15.102.
9 Sec. 10. ALTERNATE ENERGY REVOLVING LOAN FUND —— MONEYS
10 TRANSFERRED AND APPROPRIATED. Any unencumbered or unobligated
11 moneys remaining after June 30, 2021, in the alternate energy
12 revolving loan fund created pursuant to section 476.46, are
13 transferred and appropriated to the energy infrastructure
14 revolving loan fund created pursuant to section 476.46A, to be
15 used for purposes of the energy infrastructure revolving loan
16 program.
17 EXPLANATION
18 The inclusion of this explanation does not constitute agreement with
19 the explanation’s substance by the members of the general assembly.
20 This bill relates to matters under the purview of the
21 economic development authority. The bill is divided into
22 divisions.
23 DIVISION I —— HIGH QUALITY JOBS AND OTHER TAX CREDITS.
24 Division I changes the maximum amount of tax credits that the
25 economic development authority (authority) may allocate to the
26 high quality jobs program for the fiscal year beginning July
27 1, 2021, and ending June 30, 2022, from $105 million to $80
28 million. The maximum amount of tax credits that the authority
29 may allocate to