While specifics parameters of the project are currently unknown, the following resources may be used.
Iowa New Jobs Training Program
Through established criteria, a company has a funding resource available to them that assists them in the training of their employees through Southwestern Community College. If locating in an Enterprise Zone, training dollars are increased. As an example, should you hire new employees at an average wage of $12.56 per hour, the following fund could be available:
........................................ Total Estimated Annual Payroll $4,420,000
......................................................... Benefit to company: $500,000
........................................ Total Estimated Annual Payroll $3,640,000
.......................................................... Benefit to company $420,000
........................................ Total Estimated Annual Payroll $3,120,000
.......................................................... Benefit to company $345,000
Iowa’s employee training programs have evolved from a business expansion incentive tool into a comprehensive, targeted human resource tool available to all Iowa businesses.
The Iowa New Jobs Training Program (260E) was developed to assist businesses that are creating new positions or new jobs. If the company is expanding operations, or locating a new facility in the state, the New Jobs Training Program can provide flexible funding to meet the wide variety of training and employee development needs for its new employees. The assistance available ranges from highly specialized educational programs to basic skill training for new positions.
The Iowa New Jobs Training Program provides a variety of valuable services, including:
• Basic adult education
• Job-related instruction
• Skill assessment
• Training equipment, materials and supplies
• Training services of a community college or another educational institution
• Testing and evaluation of employees
• Customized or general instruction at a training facility selected by the employer
• Reimbursement of training travel costs for employees
• College tuition, books and fees
· Training services of a private trainer
Another benefit of the Iowa New Jobs Training Program is the Iowa New Jobs Tax Credit. The tax credit is available to a company that has entered into a New Jobs Training Program agreement and will increase its employment in Iowa by at least 10 percent.
Midwestern Disaster Area Bonds
Projects in Montgomery County qualify for MDA Bonds that can be used for a broad array of products that would reduce borrowing cost to the project owner.
Research and Development Tax Credit
A refundable credit for increasing research activities is up to 6.5 percent of the company’s allotted share of qualifying research expenditures in Iowa. This can also be doubled under certain programs.
Local Tax Abatement
Iowa law allows cities and counties to abate local property taxes for improving industrial real estate.
Tax Increment Financing
City councils or boards of supervisors may use the property taxes resulting from the increase in taxable valuation caused by the construction of new industrial or commercial facilities to provide economic development incentives to a business.
GROW IOWA VALUES FINANCIAL ASSISTANCE PROGRAM (GIVFAP)
JOB CREATION AND RETENTION PROJECTS
The Grow Iowa Values Financial Assistance Program (GIVFAP) serves as the funding source for projects that are focused on job creation or retention, value-added agriculture and entrepreneurial efforts. This program, combined with Iowa’s nationally recognized business climate, tax incentives and proactive state government make Iowa a great place to do business.
In addition to GIVFAP funding, IDED also administers federal funds for job creation purposes. Additional requirements for federal funding are described below.
For Job Creation and/or Retention Projects
IDED administers both state and federal funding that can help finance a wide variety of business operations; including biosciences, advanced manufacturing, information technology and financial services.
This funding provides financial assistance to companies that create new employment opportunities and/or retain existing jobs and make new capital investment in Iowa. The amount of funding is based, in part, on the number of jobs to be created/retained. Funds are provided in the form of loans and forgivable loans. State assistance is typically $3,000 to $5,000 per job with 50% forgivable and 50% low-interest loan.
These state and federal investments are used to leverage primary project financing, such as bank financing and private investment, as well as local support.
• Contracting Periods
- Three-year performance period
- Two-year performance period
• Standard Benefits
- Some level of medical benefits required
80% medical and dental (single), OR
50% medical and dental (family), OR
Monetary equivalent of other benefits (retirement, profit sharing, life; disability; HSA; etc.)
· Other Project Factors
- Fiscal impact ratio
- Local match
• The proposed or existing operation must be located in Iowa
• The business must make a capital investment related to the proposed project
• The business must demonstrate a need for the requested funds
• The project must not be initiated prior to approval of the application
• The business must provide and contribute to medical coverage.
• Recipients of federal funding must employ at least 51 percent of available positions to Iowans who can be qualified as Low-to-Moderate Income.
• Recipients of federal funding require that 51 percent of the jobs created or retained be filled by low and moderate income persons, or that first consideration be given to hiring low and moderate-income persons. Low and moderate income is a much higher income level than the poverty level, and it is calculated based on family size and the county in which the person resides.
Projects are also evaluated according to the following criteria:
• The quality of the created/retained jobs (i.e., employee wages and benefit packages)
• The significant, positive impact the project makes on the community and the net economic gain to the state
• For state assistance, the type and amount of community support to be contributed to the project
• The impact of the proposed project on in-state competitors
• The quality of collateral pledged in the project
Promoting development in economically distressed areas
Enterprise Zones are designed to stimulate development by targeting economically distressed areas in Iowa. Through state and local tax incentives, businesses and developers are encouraged to make new investments, and create or retain jobs in these areas. The goal of the program is to revitalize these areas and make them competitive with other locations throughout the state. An incentive for housing development may also be available to developers and contractors building or rehabilitating housing in an established enterprise zone
An Incentive for Business Expansion
Businesses locating or expanding in an established Enterprise Zone may be eligible to receive certain local and state tax incentives.
• The business must make a minimum qualifying investment of $500,000 over a three year period. Qualifying investment includes the cost of land, buildings, improvements to buildings, manufacturing machinery and equipment, and/or computer hardware.
• The business must create or retain at least 10 full-time, project-related jobs over a three year period and maintain them for an additional two years.
• The business must provide some level of medical benefits to all full time employees. Additionally, the business must also provide all full-time employees with a standard medical and dental insurance plan of which the business pays 80% of the premiums for employee-only coverage, pays 50% of the premiums for family coverage, or provides a monetarily-equivalent benefit package.
· The business must pay new or retained employees a starting wage which is equal to or greater than 90% of the average county or regional wage, whichever is lower.
• The business can not be a retail establishment or a business whose entrance is limited by coverage charge or membership
• The business can not close or relocate its operation in one area of the state and relocate substantially the same operation in the Enterprise Zone.
• The local Enterprise Zone Commission and IDED must approve the business' application for Enterprise Zone program incentives prior to project initiation.
• A local property tax exemption of up to 100% of the value added to the property to a period not to exceed 10 years may be available.
• Additional funding for training new employees. If applicable, these funds would be in addition to those authorized under the Iowa New Jobs Training Program.
• A refund of state sales, service, or use taxes paid to contractors or subcontractors during construction.
• For distribution center projects, a refund of sales and use taxes paid on racks, shelving, and conveyor equipment.
• An investment tax credit of up to a maximum of 10% of the qualifying investment, amortized over 5 years. This tax credit is earned when the corresponding asset is placed in service and can be carried forward for up to seven additional years or until depleted, whichever occurs first.
• The State's refundable research activities credit may be doubled while the business is participating in the program.
• Individual Enterprise Zones may have additional requirements. Contact the Iowa Department of Economic Development along with relevant local organizations to determine eligibility. Businesses locating or expanding in an Enterprise Zone may apply for benefits by completing an application (download available below). Local Enterprise Zone Commissions review applications and, upon approval, forward them to the Iowa Department of Economic Development for final approval.