Iowa Industrial New Jobs Training (260E)

General Program Information: The Iowa Industrial New Jobs Training (260E) Program provides businesses, which are expanding their Iowa workforce, with funding for new employee training. Available through each of Iowa’s 15 community colleges, the program is financed through bonds sold by the administering college. Depending on wages paid, the business then diverts 1.5% or 3 % of the Iowa state withholding taxes generated by the new positions to the community college to retire the bonds. Because of this structure, the training fund is made available to the company at what is essentially no cost, since the bonds are retired with dollars that otherwise would have been paid to the state as withholding taxes. In addition to increasing worker productivity and company profitability through structured training activities, businesses participating in the Iowa Industrial New Jobs Training Program may also be eligible for reimbursement of costs associated with on-the-job training, as well as, a corporate tax credit if Iowa employment is increased by at least 10 percent.

Program Purpose: The Iowa Industrial New Jobs Training Program (260E) is designed to lower the cost of expanding and training a workforce by providing funds for employee training for newly created positions.

Determining Program Award Amount – Project Funding Specifics:

    • Number of positions created over three years
    • Starting hourly wage rate of positions being created
    • Average County/Regional wage where jobs will be created
    • Equals Program Amount: $$$

Training Fund Uses: A certain percentage of the training fund may be used for on-the-job-training wage reimbursement. All or a remainder of the training fund will be used to cover structured training activities. The company in conjunction with North Iowa Area Community College will design a customized training plan to meet the needs of the company. The structured training activities coverable under the program are virtually endless. Under the program participating companies are able to train their new employees with their own trainers and on their own equipment and receive training funds to cover these costs.

Program Funding Source: The College sells training bonds to create the training fund. The bonds are repaid by diverting a portion of state tax withholdings from the new jobs to the college to retire the training bonds. This repayment mechanism allows the program to be offered to the company at no cost.

Iowa Industrial New Jobs Tax Credit: Businesses entering into an Iowa Industrial New Jobs Training Program (260E) agreement, and which increase their workforce by at least 10 percent, may qualify for this credit to its Iowa corporate income tax. This credit is equal to 6 percent of the state unemployment insurance taxable wage base. The credit for 2010 is $1,470 per new employee. The tax credit can be carried forward up to 10 years.

Limitations: Dollars available through the program are dependent upon the training and development needs and projected tax revenue available to repay the bonds.

Eligible Applicants: Company must be located in, or relocating to Iowa.

    • Must be located in or relocating to Iowa
    • Must be engaged in interstate or intrastate commerce for the purpose of manufacturing, processing, assembling products, warehousing, wholesaling, or conducting research and development.
    • Service-providing businesses must have customers outside of Iowa.
    • Cannot have closed or substantially reduced its employment base at any of its other business sites in Iowa in order to relocate substantially the same operation to another area of the state.
    • Eligible positions must be newly created positions (positions that did not exist during the six months prior to the date that the business and community college agree to pursue a training project) and on which the participating company pays Iowa withholding tax.

Ineligible Applicants: – Retail, health and professional services businesses do not qualify.

Application Process: Application is made through the NIACC John Pappajohn Entrepreneurial Center. Please contact Terry Schumaker – schumter@niacc.edu, Economic Development Director.