SF 2154 – Economic development provisions
SF 2257/SSB 3153 – Iowa Finance Authority bonds
SF 2277/SF 2084 – Motor oil franchise agreement
SF 2280/SSB 3094 – Enhance Iowa
SF 2285/SSB 3001 – Renewable Chemical Tax Credit
FLOOR ACTION:
SF 2154 makes minor changes to the life-cycle cost analysis for public facilities. The requirement for life-cycle cost analysis was established more than 30 years ago to ensure that public agencies optimize energy efficiency when constructing or renovating public buildings. The State Building Code Commissioner currently reviews the life cycle cost analysis.
The bill:
- Places authority for further defining the evaluation methodology with the State Building Code Commissioner instead of the Iowa Economic Development Authority (IEDA).
- Creates a new definition of “addition” and amends some existing definitions.
- Makes technical changes related to the definition of a “new investment” under the High Quality Jobs Programs.
- Makes changes to IEDA’s Business Outreach Program to assist with applications to the Federal Small Business Innovation Research and Small Business Technology Transfer Program.
- Allows IEDA to provide financial assistance of up to $100,000 to any single business. Currently, the maximum is $25,000 and may be provided as matching funds for the business to qualify for one of the federal programs.
- Allows a city or county and IEDA — for compliance reasons — to amend Enterprise Zone agreements as long as the changes do not increase the incentives awarded.
[2/22: 47-2 (Bolkcom, Quirmbach “no”; Feenstra excused)]
COMMITTEE ACTION:
SF 2257/SSB 3153 gives the Iowa Finance Authority the ability to issue bonds for entities with locations in Iowa and other states that want to use the bonds for projects in Iowa and outside of Iowa. The entities are nonprofit and the bonds are tax-exempt. These are conduit bonds, not debt of the state or of the Iowa Finance Authority.
[2/18: short form]
SF 2277/SF 2084 relates to the sources of goods or services under a franchise agreement. The bill limits the ability of a franchisor to prescribe specifications and standards regarding the purchase of goods or services to specifications and standards that are customary and reasonable. A franchisor cannot designate a source for a franchisee’s purchase of motor oil labeled in accordance with the requirements of the American Petroleum Institute.
[2/18: short form]
SF 2280/SSB 3094 establishes an Enhance Iowa Board to assume the powers and the duties of the Vision Iowa Board, along with additional powers and duties. The bill establishes an Enhance Iowa Fund and a Sports Tourism Program and Fund. There is an appropriation of $25 million from the General Fund to the Enhance Iowa Fund for 10 fiscal years, beginning in 2016-17. The $25 million appropriation only occurs if the General Fund receives a transfer of more than $100 million in that fiscal year from the Iowa Economic Emergency Fund.
Allocation of the $25 million:
- $250,000 to Iowa Economic Development Authority to administered and market the Enhance Iowa Program
- $1 million for Sports Tourism
- $2 million for Community Attraction and Tourism Fund (CAT)
- $2 million for River Enhancement Community Attraction and Tourism Fund
- $6 million for grants, at the discretion of the Board to the Department of Natural Resources, Department of Transportation or the Department of Agricultural & Land Stewardship. The $6 million would be divided up this way:
- $2 million for State Parks Infrastructure (low head dam mitigation) or Natural Resources and Outdoor Recreation Trust Account
- $2 million for the watershed protection account in the natural resources and outdoor recreation trust fund
- $2 million for trails (DNR, DOT, Agriculture)
- $13.75 million at the discretion of the Enhance Iowa Board for all of the programs and purposes from the above list.
The purpose of Sports Tourism is to provide financial assistance for projects that promote sporting events for accredited colleges and universities and professional sporting events. A Convention and Visitors Bureau or a Regional Sports Authority district can apply for the financial assistance. An amendment was adopted in committee that:
- Makes minor changes to the Enhance Iowa Board makeup.
- Increases the CAT allocation from $2 million to $3 million. Then decrease the allocation to the Enhance Iowa Fund from $13.75 to $12.75 million.
- Includes a prohibition on the use of money in this bill to the Department of Natural Resources for acquiring lands, waters, or interest in lands and waters.
- Tightens up the uses of the Sport Tourism financial assistance.
- Allows a city, county or public organization to apply for financial assistance to the Sports Tourism Program.
- [2/18: short form (Bowman “pass”)]
SF 2285/SSB 3001 establishes a Renewable Chemical Production Tax Credit administered by the Iowa Economic Development Authority (IEDA) to encourage industries to turn byproducts from biomass feedstock into higher-value building block chemicals. The tax credit is given by weight ($0.05 per pound of chemical produced) with annual limits of $1 million for start-ups and $500,000 for established businesses. An eligible business may not receive more than five credits under the program.
The Renewable Tax Credit is capped at $10 million per year under IEDA’s $170 million aggregate cap. The credit is refundable. The bill decreases the High Quality Jobs Program tax credit that is also under the $170 million cap by $25 million for five fiscal years. The credit is available for chemicals produced between January 1, 2017, and December 31, 2027. The first tax credits cannot be awarded until July 1, 2018, and no credits can be claimed prior to September 1, 2018. Tax credits are awarded on a first-come, first-served basis.
An amendment was adopted in committee that:
- Requires the IEDA in FY22 to reduce the High Quality Jobs Program allocation by another $25 million for one more fiscal year if renewable tax credits awarded on or after July 1, 2019 but before July 1, 2021 equal or exceed $27 million.
- Adds the Renewable Chemical Production Tax Credit to the Legislative Tax Expenditure Committee review schedule.
- Defines glycerin as “crude” and a purity level below 95 percent.
- Defines glycerol as “high-purity glycerol” with a purity level of 95 percent or higher.
- Adds oleic acid and lauric acid to the list of building block chemicals.
- Tightens eligibility for expanded production. Creates a pre-eligibility production threshold.
- Shortens the production eligibility time by one year. The last year for production is in calendar year 2026 instead of 2027.
- Requires IEDA to report to the Legislature and the Governor on this new tax credit program.
- [2/18: short form]