Iowa House votes to extend jobs program another five years

DES MOINES - Legislation aimed at helping some Iowa border communities compete with neighboring states is on its way to the governor.

The targeted jobs program allows qualifying businesses to apply for state withholding tax credits if they plan to relocate or expand in Iowa, provided they are creating or retaining jobs.

The tax credit equals 3 percent of the gross wages to each employee filling the new jobs. The businesses can claim the tax credits, but the same amount is diverted to local cities that use the money for urban renewal projects benefiting the business.

First created in 2006, the program is available only in Sioux City, Council Bluffs, Burlington, Fort Madison and Keokuk. The legislation, which passed on a 96-2 vote Tuesday in the House, extends the program another five years.

“This is very important for Sioux City,” said Rep. Chris Hall, D-Sioux City. “In Sioux City, it helped create 1,500 jobs and is responsible for $98 million in capital investments.”

Hall said the tax program was a key component in keeping Sabre Communications' $26 million expansion in the Southbridge Business Park.

“They were looking at spots in Texas and, I think, Oklahoma,” he said. “This became an important part of keeping them in Sioux City.”

According to a December 2012 report by the Iowa Economic Development Authority, 39 projects worth $37.6 million qualified for the program statewide from fiscal year 2007 through fiscal year 2012.

Of those awards, Sioux City had the largest total awards at $12.9 million and the highest number of projects at 27. Fort Madison had the second highest amount of awards with $9.2 million. Keokuk had a total of $7 million and Burlington had $6.8 million.

Council Bluffs in southwestern Iowa had the smallest total at $1.7 million.

“We're right on the border with Nebraska and South Dakota, which has no income tax,” Rep. Ron Jorgensen, R-Sioux City, said. “This helps us compete a little more for these business developments.”

Jorgensen said legislation that benefits only certain communities tends to raise questions from lawmakers who live outside those communities.

Rep. Mary Ann Hanusa, R-Council Bluffs, who chairs the House Economic Growth Committee, said she promised lawmakers she would meet with Economic Development Authority officials after the session adjourns to discuss expansion of the program.

“I'm not going in with any preconceived ideas, but it is something that came up during discussions, so I said I would do that,” she said. “It would obviously have a fiscal impact, and we'd have to see what that is.”