Iowa 2025-2026 Regular Session

Iowa House Bill HSB274

Introduced
2/27/25  

Caption

A bill for an act relating to tax credits awarded by the economic development authority for specific capital contributions made to certified rural business growth funds for investment in qualified businesses.

Impact

The expected impact of HSB274 includes enhanced economic activity in rural Iowa through the facilitation of investments in local businesses that qualify under the new program. By encouraging investments in growth funds that subsequently provide capital to these businesses, the bill aims to create and retain jobs, thereby strengthening the local economy. The economic development authority will start accepting applications for this program starting from January 7, 2026, indicating a future-focused strategy to bolster rural development initiatives.

Summary

House Study Bill 274 (HSB274) proposes the creation of the Iowa Rural Development Tax Credit Program. This program aims to provide tax credits for specific capital contributions made to certified rural business growth funds. It intends to stimulate investment in businesses with fewer than 250 employees located outside the state’s most populous areas. The economic development authority will oversee the administration and implementation of these tax credits, which are designed to attract investment to rural sectors and promote economic growth in those areas.

Contention

Contention around HSB274 primarily revolves around the effectiveness of tax credits as a tool for economic development versus direct funding methods. Opponents may argue that relying on tax incentives can lead to insufficient funding for essential services in the long term. Additionally, there are concerns regarding the oversight of how growth funds are utilized, including potential issues related to transparency and the actual measurement of job creation and economic growth resulting from these investments.

Companion Bills

IA SF270

Replaced by A bill for an act relating to tax credits awarded by the economic development authority for specific capital contributions made to certified rural business growth funds for investment in qualified businesses.

Previously Filed As

IA SF270

A bill for an act relating to tax credits awarded by the economic development authority for specific capital contributions made to certified rural business growth funds for investment in qualified businesses.

IA HB4735

Relating to rural development funds and insurance tax credits for certain investments in those funds; authorizing fees.

IA HB8

Income tax credit; certain investments in qualified businesses; renew and revise

IA LD691

An Act to Authorize a General Fund Bond Issue for Further Investment in Maine-based Businesses

IA HB2541

Enacting the Kansas rural business growth program act, providing a premium tax credit to incentivize capital investment in rural areas and establishing a program to be administered by the secretary of commerce for the purpose of incentivizing such investment.

IA SSB1205

A bill for an act relating to matters under the purview of the Iowa economic development authority, including tax credit limits, targeted jobs tax credits, and the major economic growth attraction program; creation of the business incentives for growth program, the seed investor tax credit program, the Iowa film production incentive program, the research and development tax credit program, and the sustainable aviation fuel production tax credit program; elimination of the high quality jobs program, the investments in qualifying businesses tax credit, employer child care tax credits, assistive device tax credits, endow Iowa tax credits, and research activities tax credits; and including effective date provisions and criminal penalties.(See SF 657.)

IA HSB305

A bill for an act relating to matters under the purview of the Iowa economic development authority, including tax credit limits, targeted jobs tax credits, and the major economic growth attraction program; creation of the business incentives for growth program, the seed investor tax credit program, the Iowa film production incentive program, the research and development tax credit program, and the sustainable aviation fuel production tax credit program; elimination of the high quality jobs program, the investments in qualifying businesses tax credit, employer child care tax credits, assistive device tax credits, endow Iowa tax credits, and research activities tax credits; and including effective date provisions and criminal penalties.(See HF 1054.)

IA H4758

Supporting the economic growth of downtowns and small businesses

IA HF1054

A bill for an act relating to matters under the purview of the Iowa economic development authority and the department of workforce development, including tax credit limits, the major economic growth attraction program, layoffs and facility closures, the brownfield redevelopment fund, and the Iowa economic emergency fund; creation of the business incentives for growth program, the seed investor tax credit program, the Iowa film production incentive program, the research and development tax credit program, and the sustainable aviation fuel production tax credit program; elimination of the high quality jobs program, the investments in qualifying businesses tax credit, employer child care tax credits, assistive device tax credits, endow Iowa tax credits, and research activities tax credits; and including effective date provisions and criminal penalties.(Formerly HSB 305.)

IA HB2765

Relating to the Rural Economic Development and Investment Program and the Texas economic development fund.

Similar Bills

No similar bills found.