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HF 2799

A bill for an act relating to matters under the purview of the economic development authority, the utilities commission, and the department of education, including creation of the headquarters expansion and development for growth and employment program, and the business incentives for growth program training fund; repeal of the new jobs tax credit program; the major economic growth attraction program; load forecasting and analysis of electric transmission system expansion plans; creation of the electric transmission system expansion planning and analysis and load forecasting fund; the industrial new jobs training program; and establishing the new jobs training program interim study committee; and including effective date provisions.

2025-2026 Regular Session

HF 2799 expands Iowa’s incentives (EDGE and MEGA), reshapes training via BIG and 260E reforms, repeals the New Jobs Tax Credit, and adds biannual load forecasting with a funding me

Signed by Governor.
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Bill Summary · HF 2799

Summary of HF 2799 (2025-2026) — Iowa

HF 2799 is a multi-divisional bill aimed at broadening Iowa’s economic development toolkit, reforming tax incentive programs, and introducing new obligations for load forecasting and electric transmission planning. It creates new programs, expands existing authorities, repeals the New Jobs Tax Credit, and establishes an interim study on the 260E training program. The bill spans divisions addressing headquarters expansion incentives, MEGA program changes, training fund mechanisms, tax credit repeal, load forecasting, and the 260E program’s future.

1) Main purpose and intent

  • Modernize and expand Iowa’s economic development apparatus.
  • Create new targeted incentives to attract and retain corporate headquarters (EDGE program).
  • Extend and recalibrate MEGA program provisions for large-scale capital investment projects (with foreign adversary restrictions).
  • Reorganize and fund workforce training through the BIG Program Training Fund.
  • Repeal the New Jobs Tax Credit while tightening and restructuring 260E program rules and funding mechanisms.
  • Establish a formal process for biannual load forecasting and electric transmission planning with funding and data-sharing requirements.
  • Create an interim legislative study committee to evaluate the 260E program.

2) Key provisions and changes

Division I — Headquarters Expansion and Development for Growth and Employment (EDGE)

  • Creates the EDGE program under the Iowa Economic Development Authority (IEDA).
  • Incentives include:
    • Qualifying wage tax credit of up to 15% of gross annual wages for new corporate jobs (for up to 3 years).
    • Qualifying wage tax credit of up to 1% of gross annual wages for retained corporate jobs (for up to 3 years; cap of $1.0 million).
  • Credits can be claimed against personal income tax, corporate income tax, franchise tax, and the moneys and credits tax; refundable if credits exceed liability.
  • IEDA may set application fees and program requirements via administrative rules.
  • Fiscal note projections show revenue reductions to General Fund beginning FY 2028, with varying amounts through FY 2032 and beyond.

Division II — Major Economic Growth Attraction (MEGA) Program

  • Extends MEGA end date from Jan 1, 2027 to Jan 1, 2030.
  • Expands eligibility timing and modifies the definition of “foreign adversary.”
  • MEGA incentives include up to:
    • 5% investment tax credit on qualifying investment.
    • Sales tax refunds for types of expenditures linked to facility construction/equipment.
    • Withholding tax credit up to 3% of gross wages for project jobs meeting wage thresholds.
  • Assumptions indicate potential for one additional MEGA award and full refund of credits in year of completion.
  • Excludes investments tied to foreign adversaries (as defined, incl. China, Russia, etc.).
  • Fiscal impact: multi-year General Fund and SAVE Fund reductions, detailed in Figure 1 of the fiscal note.

Division III — Business Incentives for Growth (BIG) Program Training Fund

  • Establishes the BIG Program Training Fund under IEDA control.
  • Funding source: diversion of up to 1.5% of gross wages for BIG agreements from income tax withholding, deposited into the Training Fund.
  • Purpose: reimburse training expenses incurred by businesses under BIG agreements.
  • Assumptions align BIG program activity with HQJ-like job creation; wages projected to grow 3% annually.
  • Fiscal impact: transfer between General Fund and Training Fund reflected in Figure 2.

Division IV — Repeal of the New Jobs Tax Credit

  • Repeals the New Jobs Tax Credit (personal and corporate income taxes) effective upon enactment.
  • Historical context: credit tied to unemployment insurance wages under the New Jobs Training (260E) program.
  • Fiscal impact: increase in General Fund revenue in early years (FY 2027–FY 2033) as the credit is repealed.

Division V — Load Forecasting

  • Requires IEDA to contract with Iowa State University (ISU) to produce a biannual load forecasting report for Iowa and the Midwest.
  • Empowers the Utilities Commission to compel all electric utilities to share necessary data with ISU for load forecasting and transmission planning analyses.
  • Creates the Electric Transmission System Expansion Plans Analysis and Load Forecasting Fund (Fund) under IEDA.
  • Utilities must remit up to 0.02% of intrastate gross operating revenues to the Fund; a rule-based aggregate remittance cap and schedule will be established.
  • Fund is exempt from reversion and can carry forward balances; interest earned remains with the Fund.
  • Fiscal: additional FTEs (~4.5) for ISU-led forecasting; initial remittances beginning FY 2027, with scheduled amounts through subsequent years (see Figure 1 in the fiscal note).

Division VI — Iowa Industrial New Jobs Training Program (260E)

  • Several 260E program reforms:
    • The new jobs credit from withholding for the 260E program ends after June 30, 2026.
    • Community colleges cannot extend 260E agreements made on or before June 30, 2026.
    • Deferred costs for 260E costs limited to 7 years for agreements after July 1, 2026.
    • Prohibits certain cost types (travel, conference, legal fees) from 260E costs.
    • Administrative expenses capped at 15% of 260E program costs.
    • Requires employers to reimburse community colleges at least 25% of training costs.
    • Establishes an interim study committee (Legislative Council) in 2026 to review the 260E program; report due by December 15, 2026.
  • Financial implications show ongoing effects on General Fund and Workforce Development Fund (WDF) allocations, with detailed projections in Figure 3.

3) Who or what would be affected

  • Public and private corporations seeking to establish or relocate headquarters to Iowa (EDGE incentives).
  • Large-scale investment projects in advanced manufacturing, bioscience, or R&D (MEGA participants).
  • Businesses and workers participating in the BIG Program (training reimbursements via the BIG Training Fund).
  • State General Fund and related funds (due to tax credit repeals and new incentives, as outlined in the fiscal notes).
  • Community colleges and employers participating in the 260E program (with major reforms and eventual termination of the withholding-based credit component in 2026).
  • Iowa Utilities Commission, IOUs, cooperatives, and municipally owned utilities (data sharing for load forecasting and funding contributions).

4) Procedural and timeline aspects

  • Effective dates:
    • Several divisions become effective upon enactment; others hinge on program start dates (EDGE first claims in FY 2028; ongoing MEGA reform through 2030; 260E changes through FY 2026–2027 transition).
  • Biannual load forecasting:
    • First report preparation: 2027–2028, with subsequent reports every two years.
  • Interim study committee:
    • Assigned to 2026 Legislature; report due by December 15, 2026.
  • Funding mechanics:
    • EDGE and other credits involve direct remittances from utilities, with caps and schedules set by IEDA and the Utilities Commission.
  • Repeal and transition:
    • New Jobs Tax Credit repealed on enactment.
    • 260E program ends withholding-based credit for new jobs from June 30, 2026; post-2026 agreements subject to new restrictions.

5) Fiscal considerations (highlights)

  • General Fund impacts: net effects vary by year, with early years showing reductions (EDGE revenue loss) and later years showing mixed results due to MEGA, BIG Training Fund, and 260E reforms.
  • Other funds: SAVE Fund, Training Fund, and the WDF are affected by the reallocation of withholding taxes and program funding.
  • The fiscal note provides year-by-year projections (FY 2027–FY 2030 and beyond) for each division, illustrating a complex net fiscal impact scenario that depends on program uptake, wage growth, and timing of credits claimed.

This summary captures the substantive elements, programmatic changes, affected parties, and key timeline and fiscal considerations in HF 2799. If you’d like, I can pull out a concise bullet-point quick-reference for policy committees or draft a one-page briefing for stakeholders.

Compiled from official sources — confirm details with the bill’s official record.

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