All Roll Calls
Yes: 103 • No: 36
IowaHF 280191st General Assembly (2025–2026)HouseWALLET
A bill for an act modifying the major economic growth attraction program, and including effective date provisions. (Formerly HSB 785.) Effective date: 10/02/2026.
Sponsored By: COMMITTEE ON WAYS AND MEANS
Signed by Governor
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Bill Overview
Analyzed Economic Effects
7 provisions identified: 3 benefits, 2 costs, 2 mixed.
Businesses can offset more Iowa taxes
Authorized investment credits offset Iowa individual and corporate income taxes, chapter 432 taxes, and the moneys and credits tax under section 533.329. Partners and LLC members can claim credits based on their ownership or share of earnings. A refund or nonrefundable-credit election must appear on the certificate before Iowa issues it. Credits cannot be carried back to earlier tax years.
Investment tax breaks for qualifying businesses
Beginning October 2, 2026, Iowa can approve one of two investment credits for a project, never both. The standard credit covers up to 5% of qualifying investment for up to two businesses, paid equally over five tax years. The rural credit covers up to 10% for one business, paid equally over ten tax years. Rural counties must have 50,000 or fewer people under the latest ten-year census. Before credits are paid, the project or designated part must be in service, with at least 50% of its new jobs on payroll paying at least 140% of the qualifying wage threshold.
More site options for qualifying businesses
Standard-credit projects need a site the business controls or a certified site larger than 250 acres. Rural-credit projects can also qualify through a documented site evaluation comparable to a certified site. Iowa’s development authority must find the project site suitable. Agricultural land can qualify for an exemption from land-holdings restrictions when it is a mega-site, part of one, or supported by a comparable site evaluation accepted by the authority.
Businesses face investment credit repayment rules
Rural-credit businesses face repayment if covered land or structures are sold, disposed of, demolished, or made unusable within ten years after credit issuance. Repayment starts at 100% within year one and falls ten percentage points yearly, reaching 10% within year ten. Separate property-eligibility rules recover 100%, 80%, 60%, or 40% within years one through four; another five-year rule allows 20% recovery, depending on the credit and timing. After a final state repayment decision, amounts owed—including an affiliate’s repayment liability—are treated as tax due from taxpayers who claimed the incentive. The development authority must notify the revenue department, which can collect unpaid amounts like unpaid return taxes; counties can also recover program property-tax exemptions.
Iowa caps businesses receiving growth incentives
Beginning October 2, 2026, the board cannot approve program incentives or agricultural land-holdings exemptions for more than two eligible businesses. The limit is one business if a rural credit is issued on or after January 1, 2030, whichever limit applies first.
Credit abuse penalties protect good-faith buyers
Businesses obtaining credits through fraud, false claims, nonqualifying spending, agreement breaches, or other program violations face repayment, interest, penalties, and legal costs. Businesses and certificate buyers share liability, but a buyer’s liability cannot exceed the credit acquired. Iowa must revoke outstanding credits and recover credits already claimed. Buyers are protected from liability, revocation, and repayment if they paid value in good faith, lacked notice of a problem, and meet the law’s nonassociation requirements.
Rural credit sales face approval deadlines
Covered rural investment credits are refundable and can be sold with state approval, but these rules exclude agreements entered after December 31, 2027. Iowa must check that buyers have no ties to a foreign adversary or foreign-adversary entity. Buyers must submit the certificate and transfer details within 90 days; Iowa must issue a replacement within 30 days. Buyers must wait for that replacement and use the original holder’s eligible tax years; excess credits can be refunded or carried forward for up to ten consecutive tax years. Under the specified Iowa income-tax rules, sellers do not count transfer proceeds as income, and buyers cannot deduct the purchase payment.
Sponsors & Cosponsors
Sponsor
COMMITTEE ON WAYS AND MEANS
Affiliation unavailable
Cosponsors
There are no cosponsors for this bill.
Roll Call Votes
House vote • 10/2/2026
Passed House
Yes: 75 • No: 17
Senate vote • 10/2/2026
Passed Senate
Yes: 28 • No: 19
Actions Timeline
Read first time, attached to SF 2508.
10/5/2026SenateExplanation of vote.
10/5/2026HouseSigned by Governor.
10/2/2026HouseReported correctly enrolled, signed by Speaker and President, and sent to Governor.
10/2/2026HouseMessage from Senate.
10/2/2026HouseImmediate message.
10/2/2026SenatePassed Senate, yeas 28, nays 19.
10/2/2026SenateSubstituted for SF 2508.
10/2/2026SenateMessage from House.
10/2/2026SenateImmediate message.
10/2/2026HousePassed House, yeas 75, nays 17.
10/2/2026HouseFiscal note.
10/2/2026legislatureIntroduced, placed on Ways and Means calendar.
10/2/2026House
Bill Text
As Introduced
Enrolled
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