Senate adopts House File 2799, revising economic development programs and 260E rules

Senator Bussello of Polk asked the Senate to adopt House File 2799, a wide‑ranging update to economic development programs that was substituted for Senate File 2506 and includes headquarters expansion incentives, a new jobs training fund, and a requirement for a third‑party load‑forecasting report.

The bill’s sponsor, Senator Bussello, outlined the measure and an amendment (Amendment 5259) before the chamber. He said the amendment "is focused on updating the 260E program; it redefines a new job, meaning a new permanent full time equivalent position added to an employer's payroll at the location of the project in excess of the base employment," and that it adds the Department of Workforce Development as a reviewing authority and creates reporting flows between the Department of Revenue, IWD and community colleges. The amendment also limits bonds issued to community colleges to 70% of total program costs and caps community college administrative costs at 15%, and it directs a study of the 260E program as a whole.

Senator Dotzler of Blackhawk rose to support the amendment, saying he "appreciate[s] the work that's been done by the Economic Development Authority and director her staff" and that the changes would refocus resources on "meaningful job training here in Iowa." After brief discussion the Senate adopted Amendment 5259 on a voice vote.

With the amendment adopted, Senator Bussello asked unanimous consent to substitute House File 2799 for Senate File 2506; that request was granted with no objections. In final remarks on the substituted bill, Senator Bussello said the legislation requires a committee review of the bonding mechanism for workforce training and expressed skepticism about using bonding for such funding in 2026. He cited past reports and program figures—saying participation in 260E has been small, that some reviews found no clear evidence of net new jobs beyond contract terms, and offering figures for diverted dollars, job‑creation rates in 2018–19, administrative expense shares, and unspent community‑college bond balances—to argue for tighter definitions of ineligible training and for administrative caps.

The Senate agreed to read House File 2799 for the final time and placed the bill on its passage. The secretary opened the roll‑call; the chair announced 41 ayes, 0 nays. The bill having received a constitutional majority was declared passed and its title agreed to. Following passage, the Senate consented to withdraw Senate File 2506 and to immediately message House File 2799.

The session recessed for committee business and later adjourned until Sunday, May 3, at 12 p.m. Republican Appropriations members were directed to caucus immediately in Room 22; Democrats on Appropriations were asked to stand by.

Next steps: the bill will be messaged to the House as passed by the Senate.