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PAG LIN 1 1 DIVISION I 1 2 Section 1. Section 358C.1, subsection 2, paragraph d, Code 1 3 Supplement 1995, is amended to read as follows: 1 4 d. "District" means a real estate improvement district as 1 5 created in this chapter, in a county designated as a pilot1 6county under section 358C.2. A real estate improvement 1 7 district shall not be created after June 30, 2000. 1 8 Sec. 2. Section 358C.3, subsection 6, Code Supplement 1 9 1995, is amended to read as follows: 1 10 6. The petition shall propose the names of three or more 1 11 trustees who shall be owners of real estate in the proposed 1 12 district or the designees of owners of property in the 1 13 proposed district, to serve as a board of trustees until their 1 14 successors are elected and qualified if the district is 1 15 organized. The board of trustees shall only carry out those 1 16 purposes which are authorized in this chapter and listed in 1 17 the petition. Each person proposed as a trustee shall 1 18 disclose whether the person has any financial interest in any 1 19 business which is or may be a developer or contractor for 1 20 public improvements within the proposed real estate 1 21 improvement district and the extent of the person's land 1 22 ownership in the district, if any. 1 23 Sec. 3. Section 358C.10, Code Supplement 1995, is amended 1 24 by adding the following new subsection: 1 25 NEW SUBSECTION. 4. A candidate to fill a vacancy or as a 1 26 successor trustee shall disclose prior to selection as a 1 27 trustee whether the person has any financial interest in any 1 28 business which is or may be a developer or contractor for 1 29 public improvements within the real estate improvement 1 30 district and the extent of the person's land ownership in the 1 31 district, if any. 1 32 Sec. 4. Section 358C.13, Code Supplement 1995, is amended 1 33 by adding the following new subsections: 1 34 NEW SUBSECTION. 1A. The board of trustees shall maintain 1 35 the official records of the district, which shall include 2 1 information regarding the service of any indebtedness of the 2 2 district, including special assessment bonds. The board shall 2 3 report annually on the progress of the district in retiring 2 4 indebtedness. 2 5 NEW SUBSECTION. 2A. The board of trustees shall provide 2 6 public notice prior to each meeting of the board. The notice 2 7 shall contain the agenda of the meeting which shall describe 2 8 the proposed actions to be taken by the board at the meeting. 2 9 NEW SUBSECTION. 6. The board of trustees shall not 2 10 prohibit or restrict the construction of manufactured homes in 2 11 a real estate improvement district. As used in this 2 12 subsection, "manufactured home" has the same meaning as under 2 13 section 435.1, subsection 2. 2 14 NEW SUBSECTION. 7. The board of trustees shall not enter 2 15 into a contract for public improvements or other services with 2 16 a board member or with any person owning more than twenty-five 2 17 percent of the land of a real estate improvement district 2 18 except as a result of competitive bidding. 2 19 Sec. 5. Section 358C.17, Code Supplement 1995, is amended 2 20 by adding the following new subsection: 2 21 NEW SUBSECTION. 4. A special assessment under this 2 22 section shall be recorded in the county in which the district 2 23 is located for each lot in the district. 2 24 Sec. 6. Section 543B.56, subsection 1, Code Supplement 2 25 1995, is amended by adding the following new paragraph: 2 26 NEW PARAGRAPH. e. Disclose the amount of any special 2 27 assessments, if any, against property in a real estate 2 28 improvement district established under chapter 358C. 2 29 Sec. 7. Section 358C.2, Code Supplement 1995, is repealed. 2 30 DIVISION II 2 31 Sec. 8. Section 403.2, subsection 3, Code 1995, is amended 2 32 to read as follows: 2 33 3. It is further found and declared that there exists in 2 34 this state the continuing need for programs to alleviate and 2 35 prevent conditions of unemployment and a shortage of housing; 3 1 and that it is accordingly necessary to assist and retain 3 2 local industries and commercial enterprises to strengthen and 3 3 revitalize the economy of this state and its municipalities; 3 4 that accordingly it is necessary to provide means and methods 3 5 for the encouragement and assistance of industrial and 3 6 commercial enterprises in locating, purchasing, constructing, 3 7 reconstructing, modernizing, improving, maintaining, 3 8 repairing, furnishing, equipping, and expanding in this state 3 9 and its municipalities, for the provision of public 3 10 improvements related to housing and residential development, 3 11 and for theprovisionconstruction of housingand residential3 12developmentfor low and moderate income families; that 3 13 accordingly it is necessary to authorize local governing 3 14 bodies to designate areas of a municipality as economic 3 15 development areas for commercial and industrial enterprises, 3 16 public improvements related to housing and residential 3 17 development, or construction of housingand residential3 18developmentfor low and moderate income families; and that it 3 19 is also necessary to encourage the location and expansion of 3 20 commercial enterprises to more conveniently provide needed 3 21 services and facilities of the commercial enterprises to 3 22 municipalities and the residents of the municipalities. 3 23 Therefore, the powers granted in this chapter constitute the 3 24 performance of essential public purposes for this state and 3 25 its municipalities. 3 26 Sec. 9. Section 403.5, subsection 2, unnumbered paragraph 3 27 1, Code 1995, is amended to read as follows: 3 28 The municipality may itself prepare or cause to be prepared 3 29 an urban renewal plan; or any person or agency, public or 3 30 private, may submit such a plan to a municipality. Prior to 3 31 its approval of an urban renewal plan, the local governing 3 32 body shall submit such plan to the planning commission of the 3 33 municipality, if any, for review and recommendations as to its 3 34 conformity with the general plan for the development of the 3 35 municipality as a whole. The planning commission shall submit 4 1 its written recommendations with respect to the proposed urban 4 2 renewal plan to the local governing body within thirty days 4 3 after receipt of the plan for review. Upon receipt of the 4 4 recommendations of the planning commission or, if no 4 5 recommendations are received within the thirty days, then, 4 6 without such recommendations, the local governing body may 4 7 proceed with the hearing on the proposed urban renewalproject4 8 plan prescribed by subsection 3. 4 9 Sec. 10. Section 403.5, subsection 3, Code 1995, is 4 10 amended to read as follows: 4 11 3. The local governing body shall hold a public hearing on 4 12 an urban renewalprojectplan after public notice thereof by 4 13 publication in a newspaper having a general circulation in the 4 14 area of operation of the municipality. The notice shall 4 15 describe the time, date, place and purpose of the hearing, 4 16 shall generally identify the urban renewal area covered by the 4 17 plan, and shall outline the general scope of the urban renewal 4 18projectactivities under consideration. A copy of the notice 4 19 shall be sent by ordinary mail to each affected taxing entity. 4 20 Sec. 11. Section 403.5, subsection 4, paragraph b, 4 21 subparagraph (1), Code 1995, is amended to read as follows: 4 22 (1) If it is to be developed for residential uses, the 4 23 local governing body shall determine that a shortage of 4 24 housing of sound standards and design with decency, safety and 4 25 sanitation exists in the municipality; that the acquisition of 4 26 the area for residential uses is an integral part of and 4 27 essential to the program of the municipality; and that one or 4 28 more of the following conditions exist: 4 29 (a) That the need for housing accommodations has been or 4 30 will be increased as a result of the clearance of slums in 4 31 other areas, including other portions of the urban renewal 4 32 area.; that the4 33 (b) That conditions of blight in theareamunicipality and 4 34 the shortage of decent, safe and sanitary housing cause or 4 35 contribute to an increase in and spread of disease and crime, 5 1andso as to constitute a menace to the public health, safety, 5 2 morals, or welfare; and that the acquisition of the area for5 3residential uses is an integral part of and essential to the5 4program of the municipality. 5 5 (c) That the provision of public improvements related to 5 6 housing and residential development will encourage housing and 5 7 residential development which is necessary to encourage the 5 8 retention or relocation of industrial and commercial 5 9 enterprises in this state and its municipalities. 5 10 (d) The acquisition of the area is necessary to provide 5 11 for the construction of housing for low and moderate income 5 12 families. 5 13 Sec. 12. Section 403.6, Code 1995, is amended by adding 5 14 the following new unnumbered paragraph: 5 15 NEW UNNUMBERED PARAGRAPH. The provisions of this chapter 5 16 shall be liberally interpreted to achieve the purposes of this 5 17 chapter. 5 18 Sec. 13. Section 403.9, subsection 3, Code 1995, is 5 19 amended by adding the following new unnumbered paragraph: 5 20 NEW UNNUMBERED PARAGRAPH. Before the local governing body 5 21 may institute proceedings for the issuance of bonds under this 5 22 section, a notice of the proposed action, including a 5 23 statement of the amount and purposes of the bonds and the time 5 24 and place of the meeting at which the local governing body 5 25 proposes to take action for the issuance of the bonds, must be 5 26 published as provided in section 362.3. At the meeting, the 5 27 local governing body shall receive oral or written objections 5 28 from any resident or property owner of the municipality. 5 29 After all objections have been received and considered, the 5 30 local governing body, at that meeting or any subsequent 5 31 meeting, may take additional action for the issuance of the 5 32 bonds or abandon the proposal to issue the bonds. Any 5 33 resident or property owner of the municipality may appeal the 5 34 decision of the local governing body to take additional action 5 35 to the district court of the county in which any part of the 6 1 municipality is located, within fifteen days after the 6 2 additional action is taken. The additional action of the 6 3 local governing body is final and conclusive unless the court 6 4 finds that the municipality exceeded its authority. 6 5 Sec. 14. Section 403.9, subsection 4, Code 1995, is 6 6 amended to read as follows: 6 7 4. Such bonds may be sold at not less than ninety-eight 6 8 percent of par at public or private sale, or may be exchanged 6 9 for other bondson the basisat not less than ninety-eight 6 10 percent of par. 6 11 Sec. 15. Section 403.10, Code 1995, is amended to read as 6 12 follows: 6 13 403.10 BONDS AS LEGAL INVESTMENT. 6 14 All banks, trust companies, building and loan associations, 6 15 savings and loan associations, investment companies and other 6 16 persons carrying on an investment business; all insurance 6 17 companies, insurance associations, and other persons carrying 6 18 on an insurance business; and all executors, administrators, 6 19 curators, trustees, and other fiduciaries, may legally invest 6 20 any sinking funds, moneys, or other funds belonging to them or 6 21 within their control in any bonds or other obligations issued 6 22 by a municipality pursuant to this chapter, or those issued by 6 23 any urban renewal agency vested with urban renewal project 6 24 powers under section 403.14: Provided, that such bonds and6 25other obligations shall be secured by an agreement between the6 26issuer and the federal government, in which the issuer agrees6 27to borrow from the federal government and the federal6 28government agrees to lend to the issuer, prior to the maturity6 29of such bonds or other obligations, moneys in an amount which,6 30together with any other moneys irrevocably committed to the6 31payment of interest on such bonds or other obligations, will6 32suffice to pay the principal of such bonds or other6 33obligations with interest to maturity thereon, which moneys6 34under the terms of said agreement are required to be used for6 35the purpose of paying the principal of and the interest on7 1such bonds or other obligations at their maturity. Such bonds 7 2 and other obligations shall be authorized security for all 7 3 public deposits. It is the purpose of this section to 7 4 authorize any persons, political subdivisions and officers, 7 5 public or private, to use any funds owned or controlled by 7 6 them for the purchase of any such bonds or other obligations. 7 7 Nothing contained in this section with regard to legal 7 8 investments shall be construed as relieving any person of any 7 9 duty of exercising reasonable care in selecting securities. 7 10 Sec. 16. Section 403.17, subsection 9, Code 1995, is 7 11 amended to read as follows: 7 12 9. "Economic development area" means an area of a 7 13 municipality designated by the local governing body as 7 14 appropriate for commercial and industrial enterprises, public 7 15 improvements related to housing and residential development, 7 16 or construction of housing and residential development for low 7 17 and moderate income families, including single or multifamily 7 18 housing. If an urban renewal plan for an urban renewal area 7 19 is based upon a finding that the area is an economic 7 20 development area and that no part contains slum or blighted 7 21 conditions, then the division of revenue provided in section 7 22 403.19 and stated in the plan shall be limited to twenty years 7 23 from the calendar year following the calendar year in which 7 24 the city first certifies to the county auditor the amount of 7 25 any loans, advances, indebtedness, or bonds which qualify for 7 26 payment from the division of revenue provided in section 7 27 403.19. Such area designated before July 1, 1994, shall not 7 28 include land which is part of a century farm. 7 29 Sec. 17. Section 403.19, subsection 2, Code 1995, is 7 30 amended to read as follows: 7 31 2. That portion of the taxes each year in excess of such 7 32 amount shall be allocated to and when collected be paid into a 7 33 special fund of the municipality to pay the principal of and 7 34 interest on loans, moneys advanced to, or indebtedness, 7 35 whether funded, refunded, assumed, or otherwise, including 8 1 bonds issued under the authority of section 403.9, subsection 8 2 1, incurred by the municipality to finance or refinance, in 8 3 whole or in part, an urban renewal project within the area, 8 4 and to provide assistance for low and moderate income family 8 5 housing as provided in section 403.22, except that taxes for 8 6 the payment of bonds and interest of each taxing district must 8 7 be collected against all taxable property within the taxing 8 8 district without limitation by the provisions of this 8 9 subsection. Unless and until the total assessed valuation of 8 10 the taxable property in an urban renewal area exceeds the 8 11 total assessed value of the taxable property in such area as 8 12 shown by the last equalized assessment roll referred to in 8 13 subsection 1, all of the taxes levied and collected upon the 8 14 taxable property in the urban renewal area shall be paid into 8 15 the funds for the respective taxing districts as taxes by or 8 16 for the taxing districts in the same manner as all other 8 17 property taxes. When such loans, advances, indebtedness, and 8 18 bonds, if any, and interest thereon, have been paid, all 8 19 moneys thereafter received from taxes upon the taxable 8 20 property in such urban renewal area shall be paid into the 8 21 funds for the respective taxing districts in the same manner 8 22 as taxes on all other property. 8 23 Sec. 18. NEW SECTION. 403.22 FINANCING PUBLIC 8 24 IMPROVEMENTS RELATED TO LOW INCOME HOUSING AND RESIDENTIAL 8 25 DEVELOPMENT. 8 26 1. With respect to any urban renewal area established upon 8 27 the determination that the area is an economic development 8 28 area, a division of revenue as provided in section 403.19 8 29 shall not be allowed for the purpose of providing or aiding in 8 30 the provision of public improvements related to housing and 8 31 residential development, unless the municipality assures that 8 32 the project will include assistance for low and moderate 8 33 income family housing. The amount to be provided for low and 8 34 moderate income family housing for such projects shall be 8 35 either equal to or greater than the percentage of the original 9 1 project cost that is equal to the percentage of low and 9 2 moderate income residents for the county in which the urban 9 3 renewal area is located as determined by the United States 9 4 department of housing and urban development using section 8 9 5 guidelines or such other amount as set out in a plan adopted 9 6 by the municipality and approved by the Iowa department of 9 7 economic development if the municipality can show that it 9 8 cannot undertake the project if it has to meet the low and 9 9 moderate income assistance requirements. 9 10 2. The assistance to low and moderate income housing may 9 11 be in, but is not limited to, any of the following forms: 9 12 a. Lots for low and moderate income housing within or 9 13 outside the urban renewal area. 9 14 b. Construction of low and moderate income housing within 9 15 or outside the urban renewal area. 9 16 c. Grants, credits or other direct assistance to low and 9 17 moderate income families living within or outside the urban 9 18 renewal area, but within the area of operation of the 9 19 municipality. 9 20 d. Payments to a low and moderate income housing fund 9 21 established by the municipality to be expended for one or more 9 22 of the above purposes, including matching funds for any state 9 23 or federal moneys used for such purposes. 9 24 3. Sources for low and moderate income family housing 9 25 assistance may include the following: 9 26 a. Proceeds from loans, advances, bonds or indebtedness 9 27 incurred. 9 28 b. Annual distributions from the division of revenues 9 29 pursuant to section 403.19 related to the urban renewal area. 9 30 c. Lump sum or periodic direct payments from developers or 9 31 other private parties under an agreement for development or 9 32 redevelopment between the municipality and a developer. 9 33 d. Any other sources which are legally available for this 9 34 purpose. 9 35 4. The assistance to low and moderate income family 10 1 housing may be expended outside the boundaries of the urban 10 2 renewal area. 10 3 5. The division of the revenue under section 403.19 for 10 4 each project under this section shall be limited to ten years 10 5 from the calendar year following the calendar year in which 10 6 the municipality first certifies to the county auditor the 10 7 amount of any loans, advances, indebtedness, or bonds which 10 8 qualify for payment from the division of the revenue in 10 9 connection with the project. The portion of the urban renewal 10 10 area which is involved in a project under this section shall 10 11 not be subject to any subsequent division of revenue under 10 12 section 403.19. 10 13 Sec. 19. Section 403A.2, subsection 8, Code 1995, is 10 14 amended to read as follows: 10 15 8. "Housing project" or "project" means any work or 10 16 undertaking: (a) to demolish, clear or remove buildings from 10 17 any slumareasarea; or (b) to provide decent, safe and 10 18 sanitary urban or rural dwellings, apartments or other living 10 19 accommodationsfor families of low income, lower-income10 20families, or very low-income families; or (c) to accomplish a 10 21 combination of the foregoing. Such work or undertaking may 10 22 include buildings, land, equipment, facilities and other real 10 23 or personal property for necessary, convenient or desirable 10 24 appurtenances, streets, sewers, water service, utilities, 10 25 parks, site preparation, landscaping, administrative, 10 26 community, health, recreational, welfare or other purposes. 10 27 The term "housing project" or "project" also may be applied to 10 28 the planning of the buildings and improvements, the 10 29 acquisition of property, the demolition of existing 10 30 structures, the construction, reconstruction, alteration or 10 31 repair of the improvements and all other work in connection 10 32 therewith, and the term shall include all other real and 10 33 personal property and all tangible or intangible assets held 10 34 or used in connection with the housing project. 10 35 Sec. 20. Section 403A.3, subsection 10, Code 1995, is 11 1 amended to read as follows: 11 2 10. To co-operate with the Iowa finance authority, to 11 3 participate in any of its programs, to use any of the funds 11 4 available to the municipality for the uses of this chapter to 11 5 contribute to such programs in which it participates, and, in 11 6 such instances, to comply with the provisions ofsections 16.111 7to 16.36chapter 16 and the rules of the Iowa finance 11 8 authority promulgated thereunder. 11 9 Sec. 21. Section 403A.6, Code 1995, is amended to read as 11 10 follows: 11 11 403A.6 OPERATION OF HOUSING NOT FOR PROFIT. 11 12 It is hereby declared to be the policy of this state that 11 13each municipality shall manage and operate its housing11 14projects in an efficient manner so as to enable it to fix the11 15rentals or payments for dwelling accommodations at low rates11 16consistent with its providing decent, safe and sanitary11 17dwelling accommodations for persons of low income, and thatno 11 18 municipality shall construct or operate any housing project 11 19 for profit, or as a source of revenue to the municipality 11 20 unless provision is made that any profits or excess revenues 11 21 shall be used only for the development of housing for families 11 22 as defined in section 403A.2, subsection 6. To this end the 11 23 municipality shall fix the rentals or payments for dwellings 11 24 in its projects at no higher rates than it shall find to be 11 25 necessary in order to produce revenues which,(together with 11 26 all other available moneys, revenues, income and receipts in 11 27 connection with or for such projects from whatever sources 11 28 derived, including federal financial assistance), will be 11 29 sufficient (1) to pay, as the same become due, the principal 11 30 and interest on the bonds issued pursuant to this chapter; (2) 11 31 to create and maintain such reserves as may be required to 11 32 assure the payment of principal and interest as it becomes due 11 33 on such bonds; (3) to meet the cost of, and to provide for, 11 34 maintaining and operating the projects,(including necessary 11 35 reserves therefor and the cost of any insurance, and of 12 1 administrative expenses); and (4) to make such payments in 12 2 lieu of taxes and, after payment in full of all obligations 12 3 for which federal annual contributions are pledged, to make 12 4 such repayments of federal and local contributions as it 12 5 determines are consistent with the maintenance of thelow-rent12 6character ofprojects. Rentals or payments for dwellings 12 7 shall be established and the projects administered, insofar as 12 8 possible, so as to assure that any federal financial 12 9 assistance required shall be strictly limited to amounts and 12 10 periods necessary to maintainthe low-rent character of12 11 federal assistance for the projects. 12 12 Sec. 22. Section 403A.7, Code 1995, is amended to read as 12 13 follows: 12 14 403A.7 HOUSING RENTALS AND TENANT ADMISSIONS. 12 15 A municipality shall (1) rent or lease the dwelling 12 16 accommodations in a housing projectonlyto persons or 12 17 familiesof low income andat rentals within their financial 12 18 reach; (2) rent or lease to a tenant such dwelling 12 19 accommodations consisting of the number of rooms which it 12 20 deems necessary to provide safe and sanitary accommodations to 12 21 the proposed occupants thereof, without overcrowding; and (3) 12 22 fix income limits for occupancy and rents after taking into 12 23 consideration (a) the family size, composition, age, physical 12 24 handicaps, and other factors which might affect the rent- 12 25 paying ability of the person or family, and (b) the economic 12 26 factors which affect the financial stability and solvency of 12 27 the project.Provided, however, such determination of12 28eligibility shall be within the limits of the income limits12 29hereinbefore set out.12 30 Nothing contained in this or the preceding section shall be 12 31 construed as limiting the power of a municipality with respect 12 32 to a housing project, to vest in an obligee the right, in the 12 33 event of a default by the municipality, to take possession or 12 34 cause the appointment of a receiver thereof, free from all the 12 35 restrictions imposed by this or the preceding section or 13 1 limiting the power to construct, manage, or operate projects 13 2 to provide housing for families who do not meet the 13 3 definitions of section 403A.2, subsection 6. 13 4 Sec. 23. Section 403A.12, unnumbered paragraph 2, Code 13 5 1995, is amended to read as follows: 13 6 Neither the governing body of a municipality nor any person 13 7 executing the bonds shall be liable personally on the bonds by 13 8 reason of the issuance thereof hereunder. The bonds and other 13 9 obligations issued under the provisions of this chapter (and 13 10 such bonds and obligations shall so state on their face) shall 13 11 be payable solely from the sources provided in this section 13 12 and shall not constitute an indebtedness within the meaning of 13 13 any constitutional or statutory debt limitation or 13 14 restriction. Bonds issued pursuant to this chapter are 13 15 declared to be issued for an essential public and governmental 13 16 purpose and to be public instrumentalities and, together with 13 17 interest thereon and income therefrom, shall be exempt from 13 18 all taxes. The tax exemption provisions of this chapter shall 13 19 be considered part of the security for the repayment of bonds 13 20 and shall constitute, by virtue of this chapter and without 13 21 the necessity of the same being restated in said bonds, a 13 22 contract between the bondholders and each and every one 13 23 thereof, including all transferees of said bonds from time to 13 24 time on the one hand and the respective municipalities issuing 13 25 said bonds and the state on the other. 13 26 Sec. 24. Section 403A.14, Code 1995, is amended by adding 13 27 the following new subsection: 13 28 NEW SUBSECTION. 11. a. Covenant that it will annually 13 29 budget or appropriate moneys, subject to statutory limitations 13 30 on the amount that may be levied, to pay all or a designated 13 31 amount of any shortfall in the income and revenues available 13 32 to pay the costs of operating or maintaining a housing project 13 33 after provision has been made for payment of bonds or restore 13 34 deficiencies in a debt service reserve fund established for 13 35 the bonds. 14 1 b. Notwithstanding paragraph "a", a municipality shall not 14 2 be obligated to appropriate or otherwise provide moneys for 14 3 the payment of operating deficit reimbursements and in the 14 4 event the municipality fails to appropriate funds for this 14 5 purpose, the municipality shall not be liable for any damages 14 6 resulting from the nonappropriation. 14 7 c. If a municipality elects to incur an obligation to 14 8 appropriate or otherwise provide moneys for the payment of 14 9 operating deficit reimbursements, the operating deficit 14 10 agreement may provide that in the event a municipality shall 14 11 fail to pay an operating deficit reimbursement, the 14 12 municipality shall be in default under the operating deficit 14 13 agreement and the default shall constitute a default by the 14 14 municipality under the loan agreement with respect to the 14 15 project. 14 16 Sec. 25. NEW SECTION. 403A.25 RULE OF CONSTRUCTION. 14 17 The provisions of this chapter shall be liberally 14 18 interpreted to achieve the purposes of this chapter. 14 19 Sec. 26. NEW SECTION. 403A.26 PAYMENT IN LIEU OF TAXES. 14 20 The municipality shall pay out of the surplus net revenues 14 21 of a project for the prior fiscal year, not required to pay 14 22 principal, interest or other requirements of its bonds, to the 14 23 state of Iowa and its city, school district, and any other 14 24 political subdivision authorized to levy taxes against 14 25 property in the jurisdiction in which the project is located, 14 26 twenty-five percent of the amount of tax for the prior fiscal 14 27 year determined by applying the tax rate of the taxing 14 28 district to the assessed value of the project, which the 14 29 state, county, school district or other political subdivision 14 30 would receive for the prior fiscal year if the project were 14 31 owned by a private person. For the purposes of arriving at 14 32 this tax equivalent, the property of the project shall be 14 33 valued and assessed by the assessor in whose jurisdiction the 14 34 project is located, in accordance with chapter 441, but the 14 35 municipality and other persons authorized by chapter 441 shall 15 1 be entitled to protest any assessment in the same manner as 15 2 any taxpayer. Income from this source shall be considered 15 3 other income under the provisions of section 384.16, 15 4 subsection 1, paragraph "b". This subsection shall apply to 15 5 projects acquired from proceeds of bonds issued under 15 6 authority of this chapter. 15 7 Sec. 27. Section 403A.28, Code 1995, is amended to read as 15 8 follows: 15 9 403A.28 PUBLIC HEARING REQUIRED. 15 10TheA municipality or municipal housing agency shall not 15 11 undertake anylow-costhousing project until such time as a 15 12 public hearing has been called, at which timethe agencyit 15 13 shall advise the public of the name of the proposed project, 15 14 its location, the number of living units proposed and their 15 15 approximate cost. If the municipality proposes to issue bonds 15 16 with respect to the project, it may combine any notice and 15 17 hearing requirement for the bonds with the notice for the 15 18 public hearing and conduct the public hearing or the bond 15 19 proposal simultaneously with the public hearing on the housing 15 20 project. Notice of the public hearing on the proposed project 15 21 shall be published at least once in a newspaper of general 15 22 circulation within the municipality, at least fifteen days 15 23 prior to the date set for the hearing. 15 24 DIVISION III 15 25 Sec. 28. Section 331.384, subsection 1, paragraph c, Code 15 26 1995, is amended to read as follows: 15 27 c. Require the removal, repair, or dismantling ofaan 15 28 abandoned or dangerous building or structure. 15 29 Sec. 29. Section 657A.1, subsections 1, 3, and 4, Code 15 30 1995, are amended to read as follows: 15 31 1. "Abandoned" or "abandonment" means that a building has 15 32 remained vacant and has been in violation of the housing code 15 33 of the city in which the property is located or the housing 15 34 code applicable in the county in which the property is located 15 35 if outside the limits of a city for a period of six 16 1 consecutive months. 16 2 3. "Building" means a building or structure located in a 16 3 city or outside the limits of a city in a county, which is 16 4 used or intended to be used for residential purposes, and 16 5 includes a building or structure in which some floors may be 16 6 used for retail stores, shops, salesrooms, markets, or similar 16 7 commercial uses, or for offices, banks, civic administration 16 8 activities, professional services, or similar business or 16 9 civic uses, and other floors are used, designed, or intended 16 10 to be used for residential purposes. 16 11 4. "Interested person" means an owner, mortgagee, 16 12 lienholder, or other person that possesses an interest of 16 13 record or an interest otherwise provable in property that 16 14 becomes subject to the jurisdiction of the court pursuant to 16 15 this chapter, the city in which the property is located, the 16 16 county in which the property is located if the property is 16 17 located outside the limits of a city, and an applicant for the 16 18 appointment as receiver pursuant to this chapter. 16 19 Sec. 30. Section 657A.2, subsections 1 and 2, Code 1995, 16 20 are amended to read as follows: 16 21 1. A petition for abatement under this chapter may be 16 22 filed in the district court of the county in which the 16 23 property is located, by the city in which the property is 16 24 located, by the county if the property is located outside the 16 25 limits of a city, a neighboring landowner, or a duly organized 16 26 nonprofit corporation which has as one of its goals the 16 27 improvement of housing conditions in the county or city in 16 28 which the property in question is located. Service on the 16 29 owner shall be by personal service or by certified mail, or if 16 30 service cannot be made by either method, by posting the notice 16 31 in a conspicuous place on the building and by publication. 16 32 2. If a petition filed pursuant to this chapter alleges 16 33 that a building is abandoned or is in a dangerous or unsafe 16 34 condition, the city, county, if the property is located 16 35 outside the limits of a city, neighboring landowner, or 17 1 nonprofit corporation may apply for an injunction requiring 17 2 the owner of the building to correct the condition or to 17 3 eliminate the condition or violation. The court shall conduct 17 4 a hearing at least twenty days after written notice of the 17 5 application for an injunction and of the date and time of the 17 6 hearing is served upon the owner of the building. Notice of 17 7 the hearing shall be served in the manner provided in 17 8 subsection 1. 17 9 Sec. 31. Section 657A.4, Code 1995, is amended to read as 17 10 follows: 17 11 657A.4 APPOINTMENT OF RECEIVER. 17 12 After conducting a hearing pursuant to section 657A.3, the 17 13 court may appoint a receiver to take possession and control of 17 14 the property in question. A person shall not be appointed as 17 15 a receiver unless the person has first provided the court with 17 16 a viable financial and construction plan for the 17 17 rehabilitation of the property in question and has 17 18 demonstrated the capacity and expertise to perform the 17 19 required work in a satisfactory manner. The appointed 17 20 receiver may be a financial institution that possesses an 17 21 interest of record in the property, a nonprofit corporation 17 22 that is duly organized and exists for the primary purpose of 17 23 improving housing conditions in the county or city in which 17 24 the property in question is located, or any person deemed 17 25 qualified by the court. No part of the net earnings of a 17 26 nonprofit corporation serving as a receiver under this section 17 27 shall benefit a private shareholder or individual. Membership 17 28 on the board of trustees of a nonprofit corporation does not 17 29 constitute the holding of a public office or employment and is 17 30 not an interest, either direct or indirect, in a contract or 17 31 expenditure of money by a city or county. No member of a 17 32 board of trustees of a nonprofit corporation appointed as 17 33 receiver is disqualified from holding public office or 17 34 employment, nor is a member required to forfeit public office 17 35 or employment by reason of the membership on the board of 18 1 trustees. 18 2 DIVISION IV 18 3 Sec. 32. NEW SECTION. 446.19A PURCHASE BY COUNTY OR CITY 18 4 FOR LOW OR MODERATE INCOME HOUSING. 18 5 Notwithstanding section 446.18, a city or county may 18 6 purchase abandoned property assessed as residential or 18 7 commercial multifamily housing which did not sell at an annual 18 8 tax sale under section 446.7 for the total amount due. Money 18 9 shall not be paid by the county or other tax-levying or tax- 18 10 certifying body for the purchase, but each of the tax-levying 18 11 and tax-certifying bodies having any interest in the taxes 18 12 shall be charged with the total amount due the tax-levying or 18 13 tax-certifying body as its just share of the purchase price. 18 14 Prior to the purchase the city or county shall file with the 18 15 county treasurer a verified statement that a parcel to be 18 16 purchased is abandoned and deteriorating in condition or is, 18 17 or is likely to become, a public nuisance, and that the parcel 18 18 is suitable for use for low or moderate income housing 18 19 following rehabilitation. 18 20 The city or county may sell the certificate of purchase. 18 21 Preference shall be given to purchasers who are low or 18 22 moderate income families or organizations which assist low and 18 23 moderate income families to obtain housing. For the purpose 18 24 of this section, "low or moderate income families" has the 18 25 same meaning as in section 403.17. All persons who purchase 18 26 certificates under this section shall demonstrate the intent 18 27 to rehabilitate the property for habitation if the property is 18 28 not redeemed. 18 29 Sec. 33. Section 447.9, unnumbered paragraph 1, Code 18 30 Supplement 1995, is amended to read as follows: 18 31 After one year and nine months from the date of sale,or18 32 after nine months from the date of a sale made under section 18 33 446.18, 446.38 or 446.39, or following the date of a sale made 18 34 under section 446.19A of abandoned property assessed for 18 35 taxation as residential property or as multifamily commercial 19 1 property, the holder of the certificate of purchase may cause 19 2 to be served upon the person in possession of the parcel, and 19 3 also upon the person in whose name the parcel is taxed, in the 19 4 manner provided for the service of original notices in R.C.P. 19 5 56.1, if the person resides in Iowa, or otherwise as provided 19 6 in section 446.9, subsection 1, a notice signed by the 19 7 certificate holder or the certificate holder's agent or 19 8 attorney, stating the date of sale, the description of the 19 9 parcel sold, the name of the purchaser, and that the right of 19 10 redemption will expire and a deed for the parcel be made 19 11 unless redemption is made within ninety days from the 19 12 completed service of the notice. The ninety-day redemption 19 13 period begins as provided in section 447.12. When the notice 19 14 is given by a county as a holder of a certificate of purchase 19 15 the notice shall be signed by the county treasurer or the 19 16 county attorney, and when given by a city, it shall be signed 19 17 by the city officer designated by resolution of the council. 19 18 When the notice is given by the Iowa finance authority or a 19 19 city or county agency holding the parcel as part of an Iowa 19 20 homesteading project, it shall be signed on behalf of the 19 21 agency or authority by one of its officers, as authorized in 19 22 rules of the agency or authority. 19 23 DIVISION V 19 24 Sec. 34. Section 16.100, subsection 2, Code 1995, is 19 25 amended by adding the following new paragraph: 19 26 NEW PARAGRAPH. f. A local housing trust fund program. 19 27 This program shall use only those moneys from the real estate 19 28 transfer tax deposited in the housing improvement fund created 19 29 in section 428A.8. 19 30 Sec. 35. Section 428A.8, unnumbered paragraph 1, Code 19 31 1995, is amended to read as follows: 19 32 On or before the tenth day of each month the county 19 33 recorder shall determine and pay to the treasurer of state 19 34 eighty-two and three-fourths percent of the receipts from the 19 35 real estate transfer tax collected during the preceding month 20 1 and the treasurer of state shalldeposit ninety-five percent20 2of the receipts in the general fund of the state andtransfer 20 3five percent ofthe receipts to the Iowa finance authority for 20 4 deposit in the housing improvement fund created in section 20 5 16.100. 20 6 DIVISION VI 20 7 Sec. 36. HOUSING PROGRAMS. There is appropriated from the 20 8 general fund of the state to the Iowa finance authority for 20 9 the fiscal year beginning July 1, 1996, and ending June 30, 20 10 1997, the following amount, or so much thereof as is 20 11 necessary, to be used for the purposes designated: 20 12 For deposit in the housing improvement fund under section 20 13 16.100 for use to fund housing programs, particularly those 20 14 programs which receive federal funding which is reduced for 20 15 the federal fiscal year beginning October 1, 1995: 20 16 .................................................. $ 10,000,000 20 17 Notwithstanding section 8.33, moneys appropriated in this 20 18 section which remain unexpended or unobligated at the close of 20 19 the fiscal year shall not revert to the general fund of the 20 20 state but shall remain available for expenditure in the 20 21 succeeding fiscal year. 20 22 EXPLANATION 20 23 Division I. Sections 1 and 7 repeal the pilot program 20 24 which limits the establishment of real estate improvement 20 25 districts to six counties, thus allowing the statewide 20 26 establishment of real estate improvement districts. Section 1 20 27 also provides that real estate improvement districts cannot be 20 28 created after June 30, 2000. 20 29 Sections 2 and 3 provide that a person proposed to be a 20 30 trustee, successor trustee, or to fill a vacancy on the board 20 31 of trustees must disclose, prior to selection as a trustee, 20 32 any financial interest the person has in a developer or 20 33 contractor who may receive a contract for public improvements 20 34 or other services in the district. A person proposed as a 20 35 trustee, successor trustee, or to fill a vacancy on the board 21 1 of trustees must also disclose the amount of land the person 21 2 owns in the district. 21 3 Section 4 requires real estate improvement districts to 21 4 allow the building of manufactured homes by prohibiting 21 5 actions by the board of trustees of the district to prohibit 21 6 or restrict the construction of manufactured homes. 21 7 Section 4 also requires the board of trustees to maintain 21 8 the official records of the district, including information 21 9 regarding the debt service of the district and to make an 21 10 annual report of the progress made by the district in retiring 21 11 the debt. 21 12 In addition, section 4 requires meeting notices to be made 21 13 public and to state the actions which will be taken by the 21 14 board at the meeting. Finally, that section prohibits the 21 15 board from entering into a contract for public improvements or 21 16 other development services with a person owning more than 25 21 17 percent of the land in the district without competitive 21 18 bidding. 21 19 Section 5 requires the existence of a special assessment to 21 20 be recorded, regarding each lot, in the county in which the 21 21 real estate improvement district is located. 21 22 Section 6 provides that real estate brokers must disclose 21 23 the existence of a special assessment against property in a 21 24 district to a potential buyer. 21 25 Division II makes the following changes to chapter 403 21 26 regarding urban renewal: 21 27 Section 8 adds to the declaration of policy regarding urban 21 28 renewal that a need exists for programs to alleviate and 21 29 prevent a shortage of housing and that programs which provide 21 30 for public improvements related to housing and residential 21 31 development and the construction of housing are essential 21 32 public purposes for the state and its municipalities. 21 33 Sections 9 and 10 provide that public hearings are to be 21 34 held on a proposed urban renewal plan, rather than on each 21 35 urban renewal project undertaken in accordance with the plan. 22 1 Section 11 requires the municipality to make a finding that 22 2 acquisition of land for residential uses is essential to the 22 3 municipality's urban renewal plan. Section 11 also requires 22 4 the municipality to find that one of four conditions exist 22 5 including that the provision of public improvements related to 22 6 housing and residential development will encourage residential 22 7 development and the retention or relocation of industrial or 22 8 commercial enterprises or that the area to be acquired under 22 9 the plan is necessary to provide for the construction of low 22 10 and moderate income housing. 22 11 Section 13 requires a public notice and hearing before 22 12 bonds may be issued for urban renewal and provides a 15 day 22 13 window, following the decision of the municipality to take 22 14 additional action to issue the bonds, for a resident or 22 15 property owner to appeal the additional action to the district 22 16 court. The additional action is final and conclusive unless 22 17 the court finds that the municipality exceeded its authority. 22 18 Section 14 provides that bonds may be sold or exchanged at 22 19 98 percent of par value or higher. 22 20 Section 15 removes the requirement that bonds and other 22 21 obligations under chapter 403 be secured by an agreement 22 22 between the issuer of the bonds and the federal government 22 23 obligating the issuer to borrow from the federal government if 22 24 necessary to pay off the bonds or obligations. 22 25 Section 16 adds public improvements related to housing 22 26 development to the definition of economic development area and 22 27 makes construction of low and moderate income housing an 22 28 alternative use (along with commercial and industrial 22 29 enterprises and public improvements for housing) for an 22 30 economic development area. The division of revenue under tax 22 31 increment financing based upon a finding that the area is an 22 32 economic development area is limited to 20 years. 22 33 Sections 17 and 18 add low and moderate income housing 22 34 assistance to the uses for which revenue from tax increment 22 35 financing may be used and set out the manner in which 23 1 assistance for public improvements related to housing and 23 2 residential development, both low and moderate income and 23 3 otherwise, may be provided. 23 4 Section 18 also provides that property in an urban renewal 23 5 area upon which public improvements related to housing and 23 6 residential development are being placed as part of a project 23 7 financed by tax increment financing can only be used for tax 23 8 increment financing once. 23 9 Tax increment financing for housing or residential 23 10 development is not allowed unless the municipality assures 23 11 that the project will include assistance for low and moderate 23 12 income family housing in an amount either based on the 23 13 percentage of low and moderate income persons in the county or 23 14 in some other amount as determined by the municipality and 23 15 agreed to by the department of economic development. 23 16 Assistance for low and moderate income housing may take many 23 17 forms, including lots for low and moderate income housing 23 18 within or outside the urban renewal area or payments to a low 23 19 and moderate income housing fund established by the 23 20 municipality. Funding sources may include revenue from tax 23 21 increment financing or any other legal source. Tax increment 23 22 financing for housing projects is limited in duration to ten 23 23 years. 23 24 Division II also makes the following changes to chapter 23 25 403A regarding municipal housing projects: 23 26 Section 19 removes the requirement that a housing project 23 27 be for families of low income, lower income or very low income 23 28 levels. 23 29 Section 21 removes the prohibition on for profit housing by 23 30 municipalities if the profits from a housing project are used 23 31 only for the development of housing for low and moderate 23 32 income families. 23 33 Section 22 eliminates the requirement that municipal 23 34 housing only be rented or leased to families of low income and 23 35 provides that municipalities shall not be limited to 24 1 constructing, managing, or operating projects for persons of 24 2 low income. 24 3 Section 23 exempts bonds issued for municipal housing 24 4 projects and the interest thereon from all taxes. 24 5 Section 24 gives a municipality the power to covenant that 24 6 it will annually budget or appropriate moneys to make up any 24 7 shortfall in the income available to pay the operating and 24 8 maintenance costs of a municipal housing project. Section 24 24 9 provides that a municipality is not obligated to do so and 24 10 that it is not liable for any damages because it does not 24 11 appropriate any money to cover the costs. If the municipality 24 12 does elect to appropriate money for the payment of operating 24 13 deficits, the municipality may be considered in default under 24 14 the loan agreement with respect to the housing project if it 24 15 fails to make an operating deficit payment. 24 16 Section 25 provides that a municipality shall make payments 24 17 in lieu of taxes out of surplus net revenues to any 24 18 jurisdiction which may levy taxes against the property on 24 19 which the housing project is located in the amount of 25 24 20 percent of the tax which is owed the taxing jurisdiction. 24 21 Section 26 provides that a municipality may combine the 24 22 public hearing on a housing project with the public hearing 24 23 regarding the issuance of bonds for the project. 24 24 Division III provides that counties may utilize the 24 25 abatement procedure regarding property which is abandoned or 24 26 deemed to constitute a public nuisance currently only 24 27 available to cities, neighboring landowners, and nonprofit 24 28 housing corporations. The county may file a petition for 24 29 abatement if the property is located outside the limits of a 24 30 city and is either abandoned and in violation of the housing 24 31 code applicable to the county or is deemed a public nuisance. 24 32 Division IV provides that cities or counties may purchase 24 33 abandoned single or multifamily housing which is tax 24 34 delinquent and which did not sell at the annual tax sale. The 24 35 city or county may retain the tax sale certificate or sell it. 25 1 If sold, preference in the sale must go to low or moderate 25 2 income families or organizations which provide housing 25 3 assistance for low or moderate income families. The holder of 25 4 the certificate may immediately send notice that the right to 25 5 redeem the property shall expire in 90 days. 25 6 Only property which is assessed for tax purposes as 25 7 residential property or as multifamily commercial housing is 25 8 eligible for purchase by a city or county in this manner and 25 9 for the shortened redemption period. 25 10 Division V. Sections 34 and 35 establish a new program for 25 11 local housing trust funds in the Iowa finance authority and 25 12 provide for the funding of the program through the real estate 25 13 transfer tax. Section 35 provides that all the proceeds from 25 14 the real estate transfer tax paid to the treasurer of state 25 15 shall be transferred to the housing improvement fund in the 25 16 Iowa finance authority. Currently, only 5 percent of the 25 17 proceeds from the transfer tax are deposited in the housing 25 18 improvement fund. 25 19 Division VI. Section 36 makes an appropriation to the Iowa 25 20 finance authority of $10 million to be used for housing 25 21 programs, particularly those whose federal funding has been 25 22 reduced for the 1995-1996 federal fiscal year. 25 23 LSB 3872HH 76 25 24 mk/jw/5.1
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