Text: SF00112 Text: SF00114 Text: SF00100 - SF00199 Text: SF Index Bills and Amendments: General Index Bill History: General Index
PAG LIN
1 1 Section 1. NEW SECTION. 16.191 LEGISLATIVE FINDINGS &endash;
1 2 PURPOSE.
1 3 The general assembly finds and declares as follows:
1 4 1. The economic health and development of Iowa communities
1 5 is tied to opportunities for jobs in and near those
1 6 communities and the availability of jobs is in part tied to
1 7 the availability of affordable, decent single-family and
1 8 multi-family housing in those communities.
1 9 2. A need exists for single-family and multi-family
1 10 housing in Iowa communities which is not being met by existing
1 11 state programs or the housing market.
1 12 3. A shortage of opportunities and means for developing
1 13 local housing exists. It is in the best interest of the state
1 14 and its citizens for cities, counties, and municipal housing
1 15 agencies to develop projects which will increase the stock of
1 16 local housing and to own and manage the housing constructed
1 17 through the project until the housing can be sold.
1 18 4. The expansion of local housing is dependent upon the
1 19 availability of financing at a sufficiently low cost to make
1 20 the construction and occupation or purchase of the housing
1 21 feasible. The local housing development program is a public
1 22 purpose for which the state may encourage the investment of
1 23 private capital in local housing development projects through
1 24 the use of public financial assistance.
1 25 Sec. 2. NEW SECTION. 16.192 LOCAL HOUSING DEVELOPMENT
1 26 PROGRAM &endash; ESTABLISHED &endash; DEFINITIONS.
1 27 1. A local housing development program is established in
1 28 the authority to provide loans to a city, a county, or a
1 29 municipal housing agency for projects to increase the housing
1 30 stock in the community. The authority may issue its bonds or
1 31 notes in accordance with section 16.26 for the purpose of
1 32 funding the loans and may make secured loans to a city, a
1 33 county, or a municipal housing agency.
1 34 2. For the purposes of this program:
1 35 a. "Municipality" means a city, county, municipal housing
2 1 agency, or other public entity authorized to undertake a
2 2 housing project and any entity organized pursuant to an
2 3 agreement under chapter 28E, consisting of a combination of
2 4 cities, counties, municipal housing agencies, or other public
2 5 entities.
2 6 b. "Pledged receipt" means with respect to any project:
2 7 (1) The income and receipts or other money derived from
2 8 the project financed with the proceeds of the bonds or notes,
2 9 including interest and principal repayments from loan
2 10 agreements.
2 11 (2) Funds, revenues, and other assets pledged by the
2 12 municipality pursuant to a loan agreement regardless of the
2 13 source of the fund or revenues.
2 14 (3) Other income and receipts of the authority determined
2 15 by the authority to be made available for the project.
2 16 c. "Program" means the local housing development program
2 17 established in this section.
2 18 d. "Project" means a local housing development project
2 19 under the program, consisting of single-unit or multi-unit
2 20 housing, for persons for whom housing is not otherwise
2 21 available in the community.
2 22 Sec. 3. NEW SECTION. 16.193 LOAN AGREEMENTS &endash; BONDS AND
2 23 NOTES.
2 24 1. The authority may issue its bonds and notes, the
2 25 proceeds of which shall be used to make program loans to a
2 26 municipality. The authority may enter into loan agreements
2 27 with a municipality to finance in whole or in part one or more
2 28 projects. The repayment obligation of the municipality may be
2 29 unsecured, secured by a mortgage or security agreement, or
2 30 secured by other security. The repayment obligation may be
2 31 evidenced by one or more notes of the municipality. The loan
2 32 agreement may contain terms and conditions the authority and
2 33 municipality deem advisable, including an operating deficit
2 34 agreement authorized by section 16.196.
2 35 2. The authority may issue its bonds and notes for
3 1 projects and may enter into a lending agreement or purchase
3 2 agreement with bondholders or noteholders containing the terms
3 3 and conditions of the repayment of and the security for the
3 4 bonds or notes. The authority may issue its bonds for one or
3 5 more projects secured by loan agreements related to those
3 6 projects. The authority and the bondholders or noteholders or
3 7 trustee agent designated by the authority may enter into an
3 8 agreement to provide for any of the following:
3 9 a. That the proceeds of the bonds and notes and the
3 10 investments of the proceeds may be received, held, and
3 11 disbursed by the authority or by a trustee or agent designated
3 12 by the authority.
3 13 b. That the bondholders or noteholders or a trustee or
3 14 agent designated by the authority may collect, invest, and
3 15 apply the amount payable under the loan agreements or any
3 16 other instruments securing the debt obligations under the loan
3 17 agreements.
3 18 c. That the bondholders or noteholders may enforce the
3 19 remedies provided in the loan agreements or other instruments
3 20 on their own behalf. If there is a default in the principal
3 21 of or interest on the bonds or notes or in the performance of
3 22 an agreement contained in the loan agreements or other
3 23 instruments, the payment or performance may be enforced in
3 24 accordance with the loan agreements or other instruments.
3 25 d. Other terms and conditions as deemed necessary or
3 26 appropriate by the authority.
3 27 3. The powers granted the authority under this program are
3 28 in addition to other powers contained in this chapter. All
3 29 other provisions of this chapter, except section 16.28,
3 30 subsection 4, apply to bonds or notes issued and power granted
3 31 to the authority under this program except to the extent they
3 32 are inconsistent with this section.
3 33 4. All bonds or notes issued by the authority in
3 34 connection with the program are exempt from taxation by this
3 35 state and the interest on the bonds or notes is exempt from
4 1 state income tax.
4 2 Sec. 4. NEW SECTION. 16.194 SECURITY &endash; RESERVE FUNDS &endash;
4 3 PLEDGES &endash; NONLIABILITY &endash; IRREVOCABLE CONTRACTS.
4 4 1. The authority may provide in the resolution, trust
4 5 agreement, or other instrument authorizing the issuance of its
4 6 bonds or notes pursuant to this program that the principal of,
4 7 premium, and interest on the bonds or notes are payable solely
4 8 out of the pledged receipts as designated in the resolution,
4 9 trust agreement, or other instrument authorizing the issuance
4 10 of the bonds or notes.
4 11 2. The authority may establish reserve funds to secure one
4 12 or more issues of its bonds or notes. The authority may
4 13 deposit in a reserve fund established under this section the
4 14 proceeds of the sale of its bonds or notes and other moneys
4 15 which are made available from any other source.
4 16 3. A pledge made in respect of bonds or notes shall be
4 17 valid and binding from the time the pledge is made, and the
4 18 money or property so pledged and received after the pledge by
4 19 the authority shall immediately be subject to a lien or the
4 20 pledge without physical delivery or further act, and that the
4 21 lien or the pledge shall be valid and binding as against all
4 22 parties having claims of any kind in tort, contract, or
4 23 otherwise against the authority whether or not the parties
4 24 have notice of the lien or pledge. The resolution, trust
4 25 agreement, or other instrument by which a pledge is created
4 26 need not be recorded or filed in accordance with chapter 554
4 27 to be valid, binding, or effective against any parties.
4 28 4. The members of the authority and a person executing the
4 29 bonds or notes are not liable personally on the bonds or notes
4 30 and are not subject to personal liability or accountability by
4 31 reason of the issuance of the bonds or notes.
4 32 5. The bonds or notes issued by the authority are not an
4 33 indebtedness or other liability of the state or of a political
4 34 subdivision of the state within the meaning of any
4 35 constitutional or statutory debt limitations but are special
5 1 obligations of the authority, and are payable solely out of
5 2 the pledged receipts to the extent that the pledged receipts
5 3 are designated in the resolution, trust agreement, or other
5 4 instrument of the authority authorizing the issuance of the
5 5 bonds or notes as being available as security for such bonds
5 6 or notes. The authority shall not pledge the faith or credit
5 7 of the state to the payment of any bonds or notes. The
5 8 authority shall not pledge the faith or credit of a
5 9 municipality to the payment of any bonds or notes except as
5 10 agreed to by the municipality in its loan agreement. The
5 11 issuance of any bonds or notes by the authority does not
5 12 directly, indirectly, or contingently obligate the state to
5 13 apply moneys from, or levy or pledge any form of taxation
5 14 whatever to the payment of the bonds or notes. The issuance
5 15 of any bonds or notes by the authority does not directly,
5 16 indirectly, or contingently obligate a municipality to apply
5 17 moneys from, or levy or pledge any form of taxation whatever
5 18 to the payment of the bonds or notes, except as agreed to by
5 19 the municipality in the loan agreement.
5 20 6. The state pledges to and agrees with the holders of
5 21 bonds or notes issued under the program, that the state will
5 22 not limit or alter the rights and powers vested in the
5 23 authority to fulfill the terms of a contract made by the
5 24 authority with respect to the bonds or notes, or in any way
5 25 impair the rights and remedies of the holders until the bonds
5 26 and notes, together with the interest on them including
5 27 interest on unpaid installments of interest, and all costs and
5 28 expenses in connection with an action or proceeding by or on
5 29 behalf of the holders, are fully met and discharged. The
5 30 authority may include this pledge and agreement of the state,
5 31 as it refers to holders of bonds or notes of the authority, in
5 32 a contract with the holders.
5 33 Sec. 5. NEW SECTION. 16.195 POWERS OF THE MUNICIPALITY.
5 34 1. For purposes of the program, a municipality may enter
5 35 into loan agreements and issue any type of obligations payable
6 1 from any security which it is authorized by law to issue. For
6 2 the purpose of this program, the development, ownership and
6 3 managing of a project constitutes an essential county purpose
6 4 and a county enterprise under chapter 331 and an essential
6 5 corporate purpose and a city enterprise under chapter 384.
6 6 2. To approve a loan agreement under this chapter for a
6 7 project, a municipality shall follow the authorization
6 8 procedures for the issuance of revenue bonds by cities as set
6 9 out in section 384.83. Chapter 75 shall not apply. No other
6 10 law governing the authorization and issuance of obligations by
6 11 a municipality shall apply to loan agreements entered into by
6 12 a municipality with the authority for purposes of the program.
6 13 3. A municipality may negotiate development agreements,
6 14 construction agreements and management agreements for the
6 15 project and shall not be subject to the provisions of any
6 16 other law relating to public hearings or public bidding
6 17 including, without limitation, section 331.341 and sections
6 18 384.95 through 384.103.
6 19 4. A municipality may enter into loan agreements
6 20 containing any terms with respect to the project the
6 21 municipality and authority determine, including the granting
6 22 of a mortgage on the project and a security interest in any
6 23 other properties, rights, funds, or revenues with respect to
6 24 the project, notwithstanding the provisions of any other law
6 25 to the contrary. Any provisions of chapters 331 and 384 which
6 26 limit the powers of cities and counties with respect to
6 27 revenue financing of city and county enterprises shall not
6 28 restrict the powers of a municipality to finance a project
6 29 under this program.
6 30 Sec. 6. NEW SECTION. 16.196 OPERATING DEFICIT AGREEMENT.
6 31 1. A municipality may enter into an operating deficit
6 32 agreement, as a part of or separately from the loan agreement,
6 33 in which the municipality may agree that, when requested to
6 34 pay an operating deficit reimbursement with respect to a
6 35 project, the municipality shall timely include in its budget
7 1 request, and use all reasonable and lawful means to obtain, an
7 2 appropriation from the governing body of the municipality for
7 3 each fiscal year of moneys sufficient to pay operating deficit
7 4 reimbursements defined in the operating deficit agreement for
7 5 a project for the prior fiscal year, or a projected operating
7 6 deficit for the project for the current fiscal year or
7 7 succeeding fiscal year. A municipality may also represent at
7 8 the time of execution of the operating deficit agreement that
7 9 it reasonably expects to budget and appropriate for all
7 10 operating deficit reimbursements and that the municipality
7 11 will take any action necessary to provide moneys for the
7 12 payment of such reimbursements from sources of the
7 13 municipality lawfully available for such purposes.
7 14 2. Notwithstanding subsection 1, the municipality shall
7 15 not be obligated to appropriate or otherwise provide moneys
7 16 for the payment of operating deficit reimbursements, and in
7 17 the event of nonappropriation by the municipality, the
7 18 municipality shall not be liable for general, special,
7 19 incidental, consequential, or other damage resulting from the
7 20 nonappropriation. The operating deficit agreement may provide
7 21 that in the event a municipality shall fail to pay an
7 22 operating deficit reimbursement, the municipality shall be in
7 23 default under the operating deficit agreement and such default
7 24 will constitute a default by the municipality under the loan
7 25 agreement with respect to the project.
7 26 3. If a project has an operating deficit for the prior
7 27 fiscal year for which the municipality is obligated to make an
7 28 operating deficit reimbursement pursuant to the terms of the
7 29 operating deficit agreement or loan agreement, the
7 30 municipality may reduce the amount of payment in lieu of taxes
7 31 provided in section 16.197 by the amount of the operating
7 32 deficit reimbursement and apply the savings to the payment of
7 33 the operating deficit reimbursement if the municipality
7 34 determines that there are no other uncommitted funds legally
7 35 available to pay the operating deficit reimbursement.
8 1 Sec. 7. NEW SECTION. 16.197 PAYMENTS IN LIEU OF TAXES.
8 2 1. A municipality owning housing pursuant to a project
8 3 shall annually pay out of the revenues from the project to the
8 4 state of Iowa and to the city, school district, and any other
8 5 political subdivision authorized to levy taxes against
8 6 property in the jurisdiction in which the project is located,
8 7 twenty-five percent of the amount of tax determined by
8 8 applying the tax rate of the taxing district to the assessed
8 9 value of the project, which the state, county, school district
8 10 or other political subdivision would receive if the project
8 11 were owned by a private person, any other provision of this
8 12 Code to the contrary notwithstanding. For purposes of
8 13 arriving at this tax equivalent, the property of the project
8 14 shall be valued and assessed by the assessor in whose
8 15 jurisdiction the project is located, in accordance with
8 16 chapter 441, but the municipality, the lessee on behalf of the
8 17 municipality with the municipality's consent, and other
8 18 persons authorized by chapter 441 shall be entitled to protest
8 19 any assessment in the same manner as any taxpayer. The
8 20 valuations of the project shall be included in any summation
8 21 of valuations in the taxing district for all lawful purposes.
8 22 Income from this source shall be considered under the
8 23 provision of section 384.16, subsection 1, paragraph "b".
8 24 2. Notwithstanding subsection 1, the payment in lieu of
8 25 taxes may be reduced in accordance with section 16.196 by
8 26 reason of a requirement to pay an operating deficit
8 27 reimbursement.
8 28 Sec. 8. NEW SECTION. 16.198 AVAILABILITY OF HOUSING
8 29 UNITS FOR PURCHASE BY RESIDENTS.
8 30 A municipality shall make provisions to facilitate the
8 31 eventual purchase of housing units in projects by residents,
8 32 including ultimately transferring multi-unit housing into
8 33 condominiums. The authority shall assist a municipality in
8 34 achieving this objective.
8 35 Sec. 9. Section 331.461, subsection 2, Code 1995, is
9 1 amended by adding the following new paragraph:
9 2 NEW PARAGRAPH. g. Local housing development projects
9 3 under section 16.192.
9 4 Sec. 10. Section 384.24, subsection 2, paragraph k, Code
9 5 1995, is amended to read as follows:
9 6 k. Housing for the elderly or physically handicapped and
9 7 local housing development projects under section 16.192.
9 8 EXPLANATION
9 9 This bill establishes the local housing development program
9 10 in the Iowa finance authority. The program shall provide
9 11 loans to cities, counties, municipal housing agencies, other
9 12 public housing entities or entities formed under chapter 28E
9 13 for the purposes of expanding the stock of affordable single-
9 14 and multi-family housing in a community as a means to enhance
9 15 the economic development of the community.
9 16 In addition, the bill provides for the manner in which a
9 17 municipality may receive loans under the program and provides
9 18 for the issuance of bonds and notes by the Iowa finance
9 19 authority to fund the loans. Municipalities may develop the
9 20 housing units under a project and may own and manage the
9 21 property. The bill provides that the objective of developing
9 22 the housing will ultimately be to transfer it to private
9 23 ownership, including turning multi-family units into
9 24 condominiums.
9 25 Further, the bill provides that projects under the local
9 26 housing development program are corporate purposes for a city
9 27 or county. Property developed through a project is subject to
9 28 a payment in lieu of taxes of 25 percent of the amount of
9 29 taxes which would have been assessed against the property by
9 30 each taxing entity.
9 31 LSB 1867XS 76
9 32 mk/jj/8
Text: SF00112 Text: SF00114 Text: SF00100 - SF00199 Text: SF Index Bills and Amendments: General Index Bill History: General Index
Iowa General Assembly
Search: Senate Bills and Amendments (76th General Assembly)
© 1996 Cornell College and League of Women Voters of Iowa
Comments? webmaster@legis.iowa.gov.
Last update: Mon Mar 4 09:39:45 CST 1996
URL: /DOCS/GA/76GA/Legislation/SF/00100/SF00113/950208.html
jhf