S.F. 2267 DIVISION I 1 URBAN RENEWAL AREAS 2 Section 1. Section 331.403, subsection 3, paragraph b, Code 3 2018, is amended by adding the following new subparagraph: 4 NEW SUBPARAGRAPH . (22) The amount and source of any 5 voluntary transfer of property taxes under section 403.19, 6 subsection 3A. 7 Sec. 2. Section 384.22, subsection 2, paragraph b, Code 8 2018, is amended by adding the following new subparagraph: 9 NEW SUBPARAGRAPH . (22) The amount and source of any 10 voluntary transfer of property taxes under section 403.19, 11 subsection 3A. 12 Sec. 3. Section 403.5, subsection 4, Code 2018, is amended 13 by adding the following new paragraph: 14 NEW PARAGRAPH . c. For urban renewal areas established on 15 or after the effective date of this division of this Act, the 16 area comprising the urban renewal area does not include real 17 property assessed as residential property, multiresidential 18 property, or agricultural property to the extent prohibited 19 under section 403.17, subsection 5, 10, or 22. 20 Sec. 4. Section 403.17, subsections 5, 10, and 22, Code 21 2018, are amended to read as follows: 22 5. “Blighted area” means : 23 a. For urban renewal areas established prior to the 24 effective date of this division of this Act, an area of a 25 municipality within which the local governing body of the 26 municipality determines that the presence of a substantial 27 number of slum, deteriorated, or deteriorating structures; 28 defective or inadequate street layout; faulty lot layout in 29 relation to size, adequacy, accessibility, or usefulness; 30 insanitary or unsafe conditions; deterioration of site or 31 other improvements; diversity of ownership, tax or special 32 assessment delinquency exceeding the fair value of the land; 33 defective or unusual conditions of title; or the existence of 34 conditions which endanger life or property by fire and other 35 -1- LSB 5981XS (3) 87 md/jh 1/ 12

S.F. 2267 causes; or any combination of these factors; substantially 1 impairs or arrests the sound growth of a municipality, retards 2 the provision of housing accommodations, or constitutes an 3 economic or social liability and is a menace to the public 4 health, safety, or welfare in its present condition and use. 5 A disaster area referred to in section 403.5, subsection 7 , 6 constitutes a “blighted area” . “Blighted area” does not include 7 real property assessed as agricultural property for purposes of 8 property taxation. 9 b. For urban renewal areas established on or after the 10 effective date of this division of this Act, an area of a 11 municipality within which the local governing body of the 12 municipality determines that the presence of a substantial 13 number of slum, deteriorated, or deteriorating structures; 14 defective or inadequate street layout; faulty lot layout in 15 relation to size, adequacy, accessibility, or usefulness; 16 insanitary or unsafe conditions; deterioration of site or 17 other improvements; diversity of ownership, tax or special 18 assessment delinquency exceeding the fair value of the land; 19 defective or unusual conditions of title; or the existence of 20 conditions which endanger life or property by fire and other 21 causes; or any combination of these factors; substantially 22 impairs or arrests the sound growth of a municipality, or 23 constitutes an economic or social liability and is a menace 24 to the public health, safety, or welfare in its present 25 condition and use. A disaster area referred to in section 26 403.5, subsection 7, constitutes a “blighted area” . “Blighted 27 area” does not include real property assessed as residential 28 property, multiresidential property, or agricultural property 29 for purposes of property taxation. 30 10. “Economic development area” means : 31 a. For urban renewal areas established prior to the 32 effective date of this division of this Act, an area of 33 a municipality designated by the local governing body as 34 appropriate for commercial and industrial enterprises, public 35 -2- LSB 5981XS (3) 87 md/jh 2/ 12

S.F. 2267 improvements related to housing and residential development, 1 or construction of housing and residential development for low 2 and moderate income families, including single or multifamily 3 housing. If an urban renewal plan for an urban renewal area is 4 based upon a finding that the area is an economic development 5 area and that no part contains slum or blighted conditions, 6 then the division of revenue provided in section 403.19 and 7 stated in the plan shall be limited to twenty years from 8 the calendar year following the calendar year in which the 9 municipality first certifies to the county auditor the amount 10 of any loans, advances, indebtedness, or bonds which qualify 11 for payment from the division of revenue provided in section 12 403.19 . Such designated area shall not include agricultural 13 land, including land which is part of a century farm, unless 14 the owner of the agricultural land or century farm agrees to 15 include the agricultural land or century farm in the urban 16 renewal area. For the purposes of this subsection , “century 17 farm” means a farm in which at least forty acres of such farm 18 have been held in continuous ownership by the same family for 19 one hundred years or more. 20 b. For urban renewal areas established on or after the 21 effective date of this division of this Act, an area of 22 a municipality designated by the local governing body as 23 appropriate for commercial and industrial enterprises and 24 public improvements related to commercial and industrial 25 development. If an urban renewal plan for an urban renewal 26 area is based upon a finding that the area is an economic 27 development area and that no part contains slum or blighted 28 conditions, then the division of revenue provided in section 29 403.19 and stated in the plan shall be limited to twenty years 30 from the calendar year following the calendar year in which the 31 municipality first certifies to the county auditor the amount 32 of any loans, advances, indebtedness, or bonds which qualify 33 for payment from the division of revenue provided in section 34 403.19. Such designated area shall not include property 35 -3- LSB 5981XS (3) 87 md/jh 3/ 12

S.F. 2267 assessed as residential property or multiresidential property. 1 Such designated area shall also not include agricultural 2 land, including land which is part of a century farm, unless 3 the owner of the agricultural land or century farm agrees to 4 include the agricultural land or century farm in the urban 5 renewal area. For the purposes of this subsection, “century 6 farm” means a farm in which at least forty acres of such farm 7 have been held in continuous ownership by the same family for 8 one hundred years or more. 9 22. “Slum area” shall mean means: 10 a. For urban renewal areas established prior to the 11 effective date of this division of this Act, an area in 12 which there is a predominance of buildings or improvements, 13 whether residential or nonresidential, which: by reason of 14 dilapidation, deterioration, age or obsolescence; by reason of 15 inadequate provision for ventilation, light, air, sanitation, 16 or open spaces; by reason of high density of population and 17 overcrowding; by reason of the existence of conditions which 18 endanger life or property by fire and other causes; or which 19 by any combination of such factors, is conducive to ill 20 health, transmission of disease, infant mortality, juvenile 21 delinquency, or crime, and which is detrimental to the public 22 health, safety, morals, or welfare. “Slum area” does not 23 include real property assessed as agricultural property for 24 purposes of property taxation. 25 b. For urban renewal areas established on or after the 26 effective date of this division of this Act, an area in 27 which there is a predominance of nonresidential buildings or 28 improvements, which: by reason of dilapidation, deterioration, 29 age or obsolescence; by reason of inadequate provision for 30 ventilation, light, air, sanitation, or open spaces; by reason 31 of high density of population and overcrowding; by reason of 32 the existence of conditions which endanger life or property 33 by fire and other causes; or which by any combination of 34 such factors, is conducive to ill health, transmission of 35 -4- LSB 5981XS (3) 87 md/jh 4/ 12

S.F. 2267 disease, infant mortality, juvenile delinquency, or crime, and 1 which is detrimental to the public health, safety, morals, 2 or welfare. “Slum area” does not include real property 3 assessed as residential property, multiresidential property, or 4 agricultural property for purposes of property taxation. 5 Sec. 5. Section 403.19, subsection 2, paragraph a, Code 6 2018, is amended to read as follows: 7 a. That Unless subject to the provisions of subsection 8 2A, that portion of the taxes each year in excess of such 9 amount shall be allocated to and when collected be paid into a 10 special fund of the municipality to pay the principal of and 11 interest on loans, moneys advanced to, or indebtedness, whether 12 funded, refunded, assumed, or otherwise, including bonds 13 issued under the authority of section 403.9, subsection 1 , 14 incurred by the municipality to finance or refinance, in whole 15 or in part, an urban renewal project within the area, and to 16 provide assistance for low and moderate income family housing 17 as provided in section 403.22 . However, except as provided 18 in paragraph “b” , taxes for the regular and voter-approved 19 physical plant and equipment levy of a school district imposed 20 pursuant to section 298.2 and taxes for the instructional 21 support program of a school district imposed pursuant to 22 section 257.19 , taxes for the payment of bonds and interest 23 of each taxing district, and taxes imposed under section 24 346.27, subsection 22 , related to joint county-city buildings 25 shall be collected against all taxable property within the 26 taxing district without limitation by the provisions of this 27 subsection . 28 Sec. 6. Section 403.19, Code 2018, is amended by adding the 29 following new subsections: 30 NEW SUBSECTION . 2A. For property located in an urban 31 renewal area for which the ordinance providing for a division 32 of revenue takes effect on or after the effective date of this 33 division of this Act or for property annexed or otherwise 34 included in an urban renewal area after the effective date 35 -5- LSB 5981XS (3) 87 md/jh 5/ 12

S.F. 2267 of the ordinance providing for a division of revenue if the 1 annexation or inclusion occurs on or after the effective date 2 of this division of this Act, that portion of the taxes each 3 year in excess of such amount shall be allocated to and when 4 collected be paid into a special fund of the municipality to 5 pay the principal of and interest on loans, moneys advanced 6 to, or indebtedness, whether funded, refunded, assumed, or 7 otherwise, including bonds issued under the authority of 8 section 403.9, subsection 1, incurred by the municipality to 9 finance or refinance, in whole or in part, an urban renewal 10 project within the area, and to provide assistance for low and 11 moderate income family housing as provided in section 403.22. 12 However, all taxes certified or imposed by a taxing entity or 13 taxing district other than the municipality shall be collected 14 against all taxable property within the taxing district without 15 limitation and allocated to and when collected be paid into the 16 fund for the respective taxing district as taxes by or for the 17 taxing district into which all other property taxes are paid. 18 NEW SUBSECTION . 3A. a. To further the purposes of an urban 19 renewal area, an affected taxing entity for which property 20 taxes imposed by the affected taxing entity are excluded from 21 the division of taxes under subsection 2A, may voluntarily 22 transfer to the municipality all or a portion of the property 23 taxes that would otherwise have been deposited into the 24 municipality’s special fund but for the exclusion. Such a 25 transfer shall be at the sole discretion of the governing body 26 of the affected taxing entity. 27 b. Amounts voluntarily transferred by a school district 28 under this subsection shall not be considered a reduction in 29 the amount of foundation property tax received by the school 30 district under section 257.3 and shall not result in an 31 increase in the amount of school foundation aid received by the 32 school district under section 257.1. 33 Sec. 7. EFFECTIVE UPON ENACTMENT. This division of this 34 Act, being deemed of immediate importance, takes effect upon 35 -6- LSB 5981XS (3) 87 md/jh 6/ 12

S.F. 2267 enactment. 1 Sec. 8. APPLICABILITY. This division of this Act applies 2 to property taxes due and payable in fiscal years beginning 3 on or after July 1, 2018, that are levied against any of the 4 following: 5 1. Property located in an urban renewal area for which the 6 ordinance providing for a division of revenue takes effect on 7 or after the effective date of this division of this Act. 8 2. Property annexed or otherwise included in an urban 9 renewal area after the effective date of the ordinance 10 providing for a division of revenue if the annexation or 11 inclusion occurs on or after the effective date of this 12 division of this Act. 13 DIVISION II 14 URBAN REVITALIZATION AREAS 15 Sec. 9. Section 404.2, subsection 2, Code 2018, is amended 16 by adding the following new paragraph: 17 NEW PARAGRAPH . 0j. (1) A list of each property tax levy 18 imposed by the designating city or designating county from 19 which qualified real estate will be exempt. In order for 20 qualified real estate to be exempt from a property tax levy 21 imposed by a taxing jurisdiction other than the designating 22 city or designating county, the governing body of each such 23 taxing jurisdiction shall adopt a resolution under section 24 404.2A identifying each property tax levy for which the 25 exemption within the revitalization area is authorized. 26 (2) This paragraph applies to ordinances designating 27 revitalization areas adopted on or after the effective date 28 of this division of this Act and to first-year exemption 29 applications filed on or after the effective date of this 30 division of this Act for revitalization areas in existence on 31 the effective date of this division of this Act. 32 Sec. 10. NEW SECTION . 404.2A Other taxing jurisdictions —— 33 resolution authorizing exemption. 34 1. a. Except as authorized in paragraph “b” , a property 35 -7- LSB 5981XS (3) 87 md/jh 7/ 12

S.F. 2267 tax exemption allowed under this chapter shall only extend to 1 those property tax levies imposed by the designating city or 2 designating county and identified by the city or county in the 3 plan adopted under section 404.2. 4 b. In order for qualified real estate to be exempt from a 5 property tax levy imposed by a taxing jurisdiction other than 6 the designating city or designating county, the governing body 7 of each such taxing jurisdiction shall first adopt a resolution 8 identifying each property tax levy for which the exemption is 9 authorized. 10 2. a. At any time following adoption of the ordinance 11 designating the revitalization area, the list of property tax 12 levies imposed by the designating city or designating county 13 from which qualified real estate will be exempt may be modified 14 by amending the plan adopted under section 404.2. However, an 15 amendment to remove a property tax levy from the list shall 16 only apply to first-year exemption applications filed on or 17 after the effective date of the amendment removing the levy 18 from the list. 19 b. At any time following adoption of the ordinance 20 designating the revitalization area, the governing body of 21 any taxing jurisdiction, other than the designating city or 22 designating county, that has authorized an exemption from one 23 or more levies under subsection 1, paragraph “b” , may extend 24 the exemption to additional levies imposed or certified for 25 levy by the taxing jurisdiction or may withdraw authorization 26 for levies previously approved. However, the withdrawal 27 of authorization for a property tax levy shall only apply 28 to first-year exemption applications filed on or after the 29 effective date of the amendment approving the withdrawal. 30 3. For purposes of this chapter, “taxing jurisdiction” means 31 a political subdivision of the state with the authority to 32 levy property taxes. “Taxing jurisdiction” includes but is not 33 limited to a city, a county, a school district, a township, or 34 a special purpose district. 35 -8- LSB 5981XS (3) 87 md/jh 8/ 12

S.F. 2267 4. Except as otherwise provided in this section, this 1 section applies to revitalization areas established on or 2 after the effective date of this division of this Act and 3 to first-year exemption applications filed on or after the 4 effective date of this division of this Act for revitalization 5 areas in existence on the effective date of this division of 6 this Act. 7 Sec. 11. NEW SECTION . 404.3C Exemptions for property used 8 for residential purposes —— prohibition. 9 For revitalization areas established under this chapter on 10 or after the effective date of this division of this Act and 11 for first-year exemption applications for property located in a 12 revitalization area in existence on the effective date of this 13 division of this Act filed on or after the effective date of 14 this division of this Act, an exemption otherwise authorized 15 under this chapter shall not be authorized for or approved by a 16 city or county, as applicable, for property that is residential 17 property or multiresidential property. 18 Sec. 12. EFFECTIVE UPON ENACTMENT. This division of this 19 Act, being deemed of immediate importance, takes effect upon 20 enactment. 21 EXPLANATION 22 The inclusion of this explanation does not constitute agreement with 23 the explanation’s substance by the members of the general assembly. 24 This bill relates to the operation and use of urban renewal 25 areas and urban revitalization areas. 26 Division I of the bill excludes the property taxes 27 certified or imposed by a taxing entity or body other than the 28 municipality that established the urban renewal area from the 29 division of revenue under Code section 403.19 (tax increment 30 financing). Under the bill, such excluded taxes are not 31 divided and paid into the municipality’s special fund for the 32 payment of urban renewal indebtedness but instead are required 33 to be levied, collected, and paid to the taxing entity or body 34 in the same manner as all other property taxes. 35 -9- LSB 5981XS (3) 87 md/jh 9/ 12

S.F. 2267 Division I of the bill also authorizes an affected taxing 1 entity to voluntarily transfer to the municipality all or 2 a portion of the property taxes that would otherwise have 3 been deposited into the municipality’s urban renewal special 4 fund but for the exclusion in the bill. However, amounts 5 voluntarily transferred by a school district are not to be 6 considered a reduction in the amount of foundation property 7 tax received by the school district and do not result in an 8 increase in the amount of school foundation aid received by the 9 school district. 10 Division I of the bill requires a municipality to include the 11 amounts of voluntary transfers of property taxes as authorized 12 in the bill in the municipality’s annual report required under 13 Code section 331.403 or Code section 384.22. 14 Under Iowa’s urban renewal law, “municipality” includes 15 cities and counties. In addition, by operation of law, the 16 bill applies to divisions of revenue adopted by a community 17 college under Code section 260E.4 and rural improvement zones 18 under Code section 357H.9. 19 Division I of the bill modifies the definitions of “slum 20 area”, “economic development area”, and “blighted area” for 21 purposes of urban renewal areas established on or after the 22 effective date of Division I of the bill to specify that such 23 areas do not include property assessed as residential property 24 or multiresidential property. The bill also modifies the 25 criteria under which an urban renewal plan for an urban renewal 26 area established on or after the effective date of Division I 27 of the bill may be approved to forbid that the area comprising 28 the urban renewal area include real property assessed as 29 residential property or multiresidential property, or include 30 certain agricultural property pursuant to current law. 31 Division I of the bill takes effect upon enactment and 32 applies to property taxes due and payable in fiscal years 33 beginning on or after July 1, 2019, that are levied against any 34 of the following: (1) property located in an urban renewal 35 -10- LSB 5981XS (3) 87 md/jh 10/ 12

S.F. 2267 area for which the ordinance providing for a division of 1 revenue takes effect on or after the effective date of Division 2 I of the bill; or (2) property annexed or otherwise included 3 in an urban renewal area after the effective date of the 4 ordinance providing for a division of revenue if the annexation 5 or inclusion occurs on or after the effective date of Division 6 I of the bill. 7 Code chapter 404 authorizes the governing body of a city to 8 designate an area of the city or the governing body of a county 9 to designate an area of the county outside the boundaries 10 of a city as a revitalization area if the property within 11 that area meets certain statutory conditions for development 12 or redevelopment. Qualified real estate located within the 13 boundaries of an urban revitalization area may be eligible 14 for specified property tax exemptions for actual value added 15 by improvements. Current law authorizes the property tax 16 exemption to extend to all property tax levies imposed on 17 qualified real estate regardless of taxing jurisdiction. 18 For revitalization areas established on or after the 19 effective date of Division II of the bill and for first-year 20 exemption applications filed on or after the effective date of 21 Division II of the bill for revitalization areas in existence 22 on the effective date of Division II of the bill, the property 23 tax exemption afforded to qualified real estate only extends to 24 those property tax levies imposed by the designating city or 25 designating county and identified by the city or county in the 26 adopted plan. In order for qualified real estate to be exempt 27 from a property tax levy imposed by a taxing jurisdiction other 28 than the designating city or designating county, the governing 29 body of each such taxing jurisdiction must first adopt a 30 resolution identifying each property tax levy for which the 31 exemption is authorized. 32 Division II of the bill also authorizes the designating 33 city or designating county to, following designation of 34 the revitalization area by ordinance, amend the list of 35 -11- LSB 5981XS (3) 87 md/jh 11/ 12

S.F. 2267 property tax levies imposed by the designating city or 1 designating county from which qualified real estate is exempt. 2 Additionally, the bill provides that at any time following 3 designation of the revitalization area by ordinance, the 4 governing body of any other taxing jurisdiction that has 5 authorized an exemption from one or more levies may extend the 6 exemption to additional levies or may withdraw authorization 7 for levies previously approved by resolution. However, the 8 removal of a levy from the designating city or county’s list 9 or withdrawal of authorization for a property tax levy only 10 applies to first-year exemption applications filed on or after 11 the effective date of the resolution amending the list or 12 approving the withdrawal, as applicable. 13 Division II of the bill also establishes limitations on 14 exemptions for residential and multiresidential property within 15 revitalization areas. For revitalization areas established 16 on or after the effective date of Division II of the bill and 17 for first-year exemption applications for property located in 18 a revitalization area in existence on the effective date of 19 Division II of the bill filed on or after the effective date 20 of Division II of the bill, an exemption otherwise authorized 21 under Code chapter 404 shall not be authorized for or approved 22 by a city or county, as applicable, for property that is 23 residential property or multiresidential property. 24 Division II of the bill takes effect upon enactment. 25 -12- LSB 5981XS (3) 87 md/jh 12/ 12