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PAG LIN 1 1 Section 1. Section 384.95, subsection 1, Code 1995, is 1 2 amended to read as follows: 1 3 1. "Public improvement" means any building or construction 1 4 work, either within or outside the corporate limits of a city, 1 5 to be paid for in whole or in part by the use of funds of the 1 6 city, regardless of sources, including a building or 1 7 improvement constructed or operated jointly with any other 1 8 public or private agency, but excluding urban renewal andlow-1 9renthousing projects authorized under chapters 403 and 403A, 1 10 industrial aid projects authorized under chapter 419, 1 11 emergency work, or work performed by employees of a city or a 1 12 city utility. 1 13 Sec. 2. Section 403.2, subsection 3, Code 1995, is amended 1 14 to read as follows: 1 15 3. It is further found and declared that there exists in 1 16 this state the continuing need for programs to alleviate and 1 17 prevent conditions of unemployment; and that it is accordingly 1 18 necessary to assist and retain local industries and commercial 1 19 enterprises to strengthen and revitalize the economy of this 1 20 state and its municipalities; that accordingly it is necessary 1 21 to provide means and methods for the encouragement and 1 22 assistance of industrial and commercial enterprises in 1 23 locating, purchasing, constructing, reconstructing, 1 24 modernizing, improving, maintaining, repairing, furnishing, 1 25 equipping, and expanding in this state and its municipalities 1 26 and for the provision of public improvements related to 1 27 housing and residential development and for construction of 1 28 housingand residential developmentfor low and moderate 1 29 income families; that accordingly it is necessary to authorize 1 30 local governing bodies to designate areas of a municipality as 1 31 economic development areas for commercial and industrial 1 32 enterprises or construction of housingand residential1 33developmentfor low and moderate income families; and that it 1 34 is also necessary to encourage the location and expansion of 1 35 commercial enterprises to more conveniently provide needed 2 1 services and facilities of the commercial enterprises to 2 2 municipalities and the residents of the municipalities. 2 3 Therefore, the powers granted in this chapter constitute the 2 4 performance of essential public purposes for this state and 2 5 its municipalities. 2 6 Sec. 3. Section 403.5, subsection 2, unnumbered paragraph 2 7 1, Code 1995, is amended to read as follows: 2 8 The municipality may itself prepare or cause to be prepared 2 9 an urban renewal plan; or any person or agency, public or 2 10 private, may submit such a plan to a municipality. Prior to 2 11 its approval of an urban renewal plan, the local governing 2 12 body shall submit such plan to the planning commission of the 2 13 municipality, if any, for review and recommendations as to its 2 14 conformity with the general plan for the development of the 2 15 municipality as a whole. The planning commission shall submit 2 16 its written recommendations with respect to the proposed urban 2 17 renewal plan to the local governing body within thirty days 2 18 after receipt of the plan for review. Upon receipt of the 2 19 recommendations of the planning commission or, if no 2 20 recommendations are received within the thirty days, then, 2 21 without such recommendations, the local governing body may 2 22 proceed with the hearing on the proposed urban renewalproject2 23 plan prescribed by subsection 3. 2 24 Sec. 4. Section 403.5, subsection 3, Code 1995, is amended 2 25 to read as follows: 2 26 3. The local governing body shall hold a public hearing on 2 27 an urban renewalprojectplan after public noticethereofof 2 28 the hearing by publication in a newspaper having a general 2 29 circulation in the area of operation of the municipality. The 2 30 notice shall describe the time, date, place and purpose of the 2 31 hearing, shall generally identify the urban renewal area 2 32 covered by the plan, and shall outline the general scope of 2 33 the urban renewalprojectactivities under consideration. A 2 34 copy of the notice shall be sent by ordinary mail to each 2 35 affected taxing entity. 3 1 Sec. 5. Section 403.5, subsection 4, paragraph b, 3 2 subparagraph (1), Code 1995, is amended to read as follows: 3 3 (1) If it is to be developed for residential uses, the 3 4 local governing body shall determine that a shortage of 3 5 housing of sound standards and design with decency, safety and 3 6 sanitation exists in the municipality; that the acquisition of 3 7 the area for residential uses is an integral part of and 3 8 essential to the program of the municipality; and that one or 3 9 more of the following conditions exist: that the need for 3 10 housing accommodations has been or will be increased as a 3 11 result of the clearance of slums in other areas, including 3 12 other portions of the urban renewal area; thattheconditions 3 13 of blight in theareamunicipality, and the shortage of 3 14 decent, safe and sanitary housing cause or contribute to an 3 15 increase in and spread of disease and crime,andso as to 3 16 constitute a menace to the public health, safety, morals, or 3 17 welfare;and that the acquisition of the area for residential3 18uses is an integral part of and essential to the program of3 19the municipalitythat the provision of public improvements 3 20 related to housing and residential development will encourage 3 21 housing and residential development which is necessary to 3 22 encourage the retention or relocation of industrial and 3 23 commercial enterprises in locating, purchasing, constructing, 3 24 reconstructing, modernizing, improving, maintaining, 3 25 repairing, furnishing, equipping, and expanding in this state 3 26 and its municipalities; and that it is necessary to provide 3 27 means and methods for the construction of housing for low and 3 28 moderate income families. 3 29 Sec. 6. Section 403.9, subsections 3 and 4, Code 1995, are 3 30 amended to read as follows: 3 31 3. Bonds issued under this section shall be authorized by 3 32 resolution or ordinance of the local governing body and may be 3 33 issued in one or more series and shall bear such date or 3 34 dates, be payable upon demand or mature at such time or times, 3 35 bear interest at such rate or rates not exceeding that 4 1 permitted by chapter 74A be in such denomination or 4 2 denominations, be in such form either coupon or registered, 4 3 carry such conversion or registration privileges, have such 4 4 rank or priority, be executed in such manner, be payable in 4 5 such medium of payment, at such place or places, and be 4 6 subject to such terms of redemption, with or without premium, 4 7 be secured in such manner, and have such other 4 8 characteristics, as may be provided by such resolution or 4 9 trust indenture or mortgage issued pursuant thereto. 4 10 Before the local governing body may institute proceedings 4 11 for the issuance of bonds under this section, a notice of the 4 12 proposed action, including a statement of the amount and 4 13 purposes of the bonds, and the time and place of the meeting 4 14 at which the local governing body proposes to take action for 4 15 the issuance of the bonds, must be published as provided in 4 16 section 362.3. At the meeting, the local governing body shall 4 17 receive oral or written objections from any resident or 4 18 property owner of the municipality. After all objections have 4 19 been received and considered, the local governing body may, at 4 20 that meeting, take additional action for the issuance of the 4 21 bonds or abandon the proposal to issue the bonds. Any 4 22 resident or property owner of the municipality may appeal the 4 23 decision of the local governing body to take additional action 4 24 to the district court of the county in which any part of the 4 25 municipality is located, within fifteen days after the 4 26 additional action is taken, but the additional action of the 4 27 local governing body is final and conclusive unless the court 4 28 finds that the municipality exceeded its authority. 4 29 4. Such bonds may be sold at not less than ninety-eight 4 30 percent of par at public or private sale, or may be exchanged 4 31 for other bondson the basisat not less than ninety-eight 4 32 percent of par. 4 33 Sec. 7. Section 403.10, Code 1995, is amended to read as 4 34 follows: 4 35 403.10 BONDS AS LEGAL INVESTMENT. 5 1 All banks, trust companies, building and loan associations, 5 2 savings and loan associations, investment companies and other 5 3 persons carrying on an investment business; all insurance 5 4 companies, insurance associations, and other persons carrying 5 5 on an insurance business; and all executors, administrators, 5 6 curators, trustees, and other fiduciaries, may legally invest 5 7 any sinking funds, moneys, or other funds belonging to them or 5 8 within their control in any bonds or other obligations issued 5 9 by a municipality pursuant to this chapter, or those issued by 5 10 any urban renewal agency vested with urban renewal project 5 11 powers under section 403.14:.Provided, that such bonds and5 12other obligations shall be secured by an agreement between the5 13issuer and the federal government, in which the issuer agrees5 14to borrow from the federal government and the federal5 15government agrees to lend to the issuer, prior to the maturity5 16of such bonds or other obligations, moneys in an amount which,5 17together with any other moneys irrevocably committed to the5 18payment of interest on such bonds or other obligations, will5 19suffice to pay the principal of such bonds or other5 20obligations with interest to maturity thereon, which moneys5 21under the terms of said agreement are required to be used for5 22the purpose of paying the principal of and the interest on5 23such bonds or other obligations at their maturity.Such bonds 5 24 and other obligations shall be authorized security for all 5 25 public deposits. It is the purpose of this section to 5 26 authorize any persons, political subdivisions and officers, 5 27 public or private, to use any funds owned or controlled by 5 28 them for the purchase of any such bonds or other obligations. 5 29 Nothing contained in this section with regard to legal 5 30 investments shall be construed as relieving any person of any 5 31 duty of exercising reasonable care in selecting securities. 5 32 Bonds and other obligations issued for the construction of 5 33 housing for low and moderate income families shall be secured 5 34 by an agreement between the issuer and the federal government, 5 35 in which the issuer agrees to borrow from the federal 6 1 government and the federal government agrees to lend to the 6 2 issuer, prior to the maturity of such bonds or other 6 3 obligations, moneys in an amount which, together with any 6 4 other moneys irrevocably committed to the payment of interest 6 5 on such bonds or other obligations, will suffice to pay the 6 6 principal of such bonds or other obligations with interest to 6 7 maturity thereon, which moneys under the terms of said 6 8 agreement are required to be used for the purpose of paying 6 9 the principal of and the interest on such bonds or other 6 10 obligations at their maturity. 6 11 Sec. 8. Section 403.17, subsection 9, Code 1995, is 6 12 amended to read as follows: 6 13 9. "Economic development area" means an area of a 6 14 municipality designated by the local governing body as 6 15 appropriate for commercial and industrial enterprises, public 6 16 improvements related to housing and residential development, 6 17 or construction of housingand residential developmentfor low 6 18 and moderate income families, including single or multifamily 6 19 housing. If an urban renewal plan for an urban renewal area 6 20 is based upon a finding that the area is an economic 6 21 development area and that no part contains slum or blighted 6 22 conditions, then the division of revenue provided in section 6 23 403.19 and stated in the plan shall be limited to twenty years 6 24 from the calendar year following the calendar year in which 6 25 the city first certifies to the county auditor the amount of 6 26 any loans, advances, indebtedness, or bonds which qualify for 6 27 payment from the division of revenue provided in section 6 28 403.19. Such area designated before July 1, 1994, shall not 6 29 include land which is part of a century farm. 6 30 Sec. 9. Section 403A.2, subsection 8, Code 1995, is 6 31 amended to read as follows: 6 32 8. "Housing project" or "project" means any work or 6 33 undertaking: (a) to demolish, clear or remove buildings from 6 34 any slumareasarea; or (b) to provide decent, safe and 6 35 sanitary urban or rural dwellings, apartments or other living 7 1 accommodationsfor families of low income, lower-income7 2families, or very low-income families; or (c) to accomplish a 7 3 combination of the foregoing. Such work or undertaking may 7 4 include buildings, land, equipment, facilities and other real 7 5 or personal property for necessary, convenient or desirable 7 6 appurtenances, streets, sewers, water service, utilities, 7 7 parks, site preparation, landscaping, administrative, 7 8 community, health, recreational, welfare or other purposes. 7 9 The term "housing project" or "project" also may be applied to 7 10 the planning of the buildings and improvements, the 7 11 acquisition of property, the demolition of existing 7 12 structures, the construction, reconstruction, alteration or 7 13 repair of the improvements and all other work in connection 7 14 therewith, and the term shall include all other real and 7 15 personal property and all tangible or intangible assets held 7 16 or used in connection with the housing project. 7 17 Sec. 10. Section 403A.3, subsection 10, Code 1995, is 7 18 amended to read as follows: 7 19 10. To co-operate with the Iowa finance authority, to 7 20 participate in any of its programs, to use any of the funds 7 21 available to the municipality for the uses of this chapter to 7 22 contribute to such programs in which it participates, and, in 7 23 such instances, to comply with the provisions ofsections 16.17 24to 16.36chapter 16 and the rules of the Iowa finance 7 25 authoritypromulgated thereunderadopted pursuant to chapter 7 26 16. 7 27 Sec. 11. Section 403A.6, Code 1995, is amended to read as 7 28 follows: 7 29 403A.6 OPERATION OF HOUSING NOT FOR PROFIT. 7 30 It is hereby declared to be the policy of this state that 7 31each municipality shall manage and operate its housing7 32projects in an efficient manner so as to enable it to fix the7 33rentals or payments for dwelling accommodations at low rates7 34consistent with its providing decent, safe and sanitary7 35dwelling accommodations for persons of low income, and thatno 8 1 municipality shall construct or operate any housing project 8 2 for profit, or as a source of revenue to the municipality. To 8 3 this end the municipality shall fix the rentals or payments 8 4 for dwellings in its projects at no higher rates than it shall 8 5 find to be necessary in order to produce revenues which, 8 6(together with all other available moneys, revenues, income 8 7 and receipts in connection with or for such projects from 8 8 whatever sources derived, including federal financial 8 9 assistance), will be sufficient(1)to do all of the 8 10 following: 8 11 1. To pay, as the same become due, the principal and 8 12 interest on the bonds issued pursuant to this chapter; (2) to. 8 13 2. To create and maintain such reserves as may be required 8 14 to assure the payment of principal and interest as it becomes 8 15 due on such bonds; (3) to. 8 16 3. To meet the cost of, and to provide for, maintaining 8 17 and operating the projects,(including necessary reserves 8 18 therefor and the cost of any insurance, and of administrative 8 19 expenses); and (4) to. 8 20 4. To make such payments in lieu of taxes and, after 8 21 payment in full of all obligations for which federal annual 8 22 contributions are pledged, to make such repayments of federal 8 23 and local contributions as it determines are consistent with 8 24 the maintenance of thelow-rent character ofprojects. 8 25 PARAGRAPH DIVIDED. Rentals or payments for dwellings shall 8 26 be established and the projects administered, insofar as 8 27 possible, so as to assure that any federal financial 8 28 assistance required shall be strictly limited to amounts and 8 29 periods necessary to maintain the low-rent character ofthe8 30 those projects designated as low-rent projects. 8 31 Sec. 12. Section 403A.7, Code 1995, is amended to read as 8 32 follows: 8 33 403A.7 HOUSING RENTALS AND TENANT ADMISSIONS. 8 34 A municipality shall(1) rentdo all of the following: 8 35 1. Rent or lease the dwelling accommodations in a housing 9 1 projectonlyto persons or familiesof low income andat 9 2 rentals within their financial reach; (2) rent. 9 3 2. Rent or lease to a tenant such dwelling accommodations 9 4 consisting of the number of rooms which it deems necessary to 9 5 provide safe and sanitary accommodations to the proposed 9 6 occupants thereof, without overcrowding; and (3) fix. 9 7 3. Fix income limits for occupancy and rents after taking 9 8 into consideration(a)the family size, composition, age, 9 9 physical handicaps, and other factors which might affect the 9 10 rent-paying ability of the person or family, and(b)the 9 11 economic factors which affect the financial stability and 9 12 solvency of the project.Provided, however, such9 13determination of eligibility shall be within the limits of the9 14income limits hereinbefore set out.9 15 Nothing contained in this or the preceding section shall be 9 16 construed as limiting the power of a municipality with respect 9 17 to a housing project, to vest in an obligee the right, in the 9 18 event of a default by the municipality, to take possession or 9 19 cause the appointment of a receiver thereof, free from all the 9 20 restrictions imposed by this or the preceding section, or 9 21 limiting the power to construct, manage, or operate projects 9 22 to provide housing for families who do not meet the 9 23 definitions of section 403A.2, subsection 6. 9 24 Sec. 13. Section 403A.12, unnumbered paragraph 2, Code 9 25 1995, is amended to read as follows: 9 26 Neither the governing body of a municipality nor any person 9 27 executing the bonds shall be liable personally on the bondsby9 28reason of the issuance thereof hereunderissued pursuant to 9 29 this chapter. The bonds and other obligations issued under 9 30 the provisions of this chapter,(and suchwhich bonds and 9 31 obligations shall so state on their face), shall be payable 9 32 solely from the sources provided in this section and shall not 9 33 constitute an indebtedness within the meaning of any 9 34 constitutional or statutory debt limitation or restriction. 9 35 Bonds issued pursuant to this chapter are declared to be 10 1 issued for an essential public and governmental purpose and to 10 2 be public instrumentalitiesand, together with interest10 3thereon and income therefrom, shall be exempt from taxes. 10 4 Income earned from the bonds, including interest, shall be 10 5 exempt from taxation. The tax exemption provisions of this 10 6 chapter shall be considered part of the security for the 10 7 repayment of bonds and shall constitute, by virtue of this 10 8 chapter and without the necessity of the same being restated 10 9 insaidthe bonds, a contract between the bondholders and each 10 10 and every one thereof, including all transferees ofsaidthe 10 11 bonds from time to time on the one hand and the respective 10 12 municipalities issuingsaidthe bonds and the state on the 10 13 other. 10 14 Sec. 14. Section 403A.14, Code 1995, is amended by adding 10 15 the following new subsection: 10 16 NEW SUBSECTION. 11. Covenant that the municipality will 10 17 annually budget or appropriate moneys, subject to statutory 10 18 limitations on the amount that may be levied, to pay all or a 10 19 designated amount of any shortfall in the income and revenues 10 20 available to pay the costs of operating or maintaining a 10 21 housing project after provision has been made for payment of 10 22 bonds or to restore deficiencies in a debt service reserve 10 23 fund established for the bonds. However, a municipality shall 10 24 not be obligated to appropriate or otherwise provide moneys 10 25 for the payment of operating deficit reimbursements, and in 10 26 the event of nonappropriation by the municipality, the 10 27 municipality shall not be liable for general, special, 10 28 incidental, consequential, or other damage resulting from the 10 29 nonappropriation. If a municipality elects to incur an 10 30 obligation to appropriate or otherwise provide moneys for the 10 31 payment of operating deficit reimbursements, the operating 10 32 deficit agreement may provide that in the event a municipality 10 33 shall fail to pay an operating deficit reimbursement, the 10 34 municipality shall be in default under the operating deficit 10 35 agreement and such default shall constitute a default by the 11 1 municipality under the loan agreement with respect to the 11 2 project. 11 3 Sec. 15. Section 403A.28, Code 1995, is amended to read as 11 4 follows: 11 5 403A.28 PUBLIC HEARING REQUIRED. 11 6TheA municipality or municipal housing agency shall not 11 7 undertake anylow-costhousing project until such time as a 11 8 public hearing has been called, at which time the municipality 11 9 or the agency shall advise the public of the name of the 11 10 proposed project, its location, the number of living units 11 11 proposed and their approximate cost. Notice of the public 11 12 hearing on the proposed project shall be published at least 11 13 once in a newspaper of general circulation within the 11 14 municipality, at least fifteen days prior to the date set for 11 15 the hearing. 11 16 EXPLANATION 11 17 This bill amends chapter 403 and provides that tax 11 18 increment financing revenues may be used for public 11 19 improvements relating to any type of housing and residential 11 20 development within an urban renewal area. Currently, tax 11 21 increment financing revenues may only be used for construction 11 22 of housing and for residential development for low or moderate 11 23 income families, as defined in chapter 403. 11 24 The bill also amends chapter 403A, the municipal housing 11 25 law, to provide that municipal housing projects may be 11 26 undertaken for all types of housing. Current law allows the 11 27 financing of municipal housing projects only for housing for 11 28 low-income, lower-income, and very low-income families, as 11 29 defined in chapter 403A. 11 30 LSB 2359HH 76 11 31 sc/jw/5
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