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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 housing which
2 20 would sell for an amount equal to or less than the maximum
2 21 purchase amount for new homes under the first time home buyer
2 22 program administered by the Iowa finance authority or multi-
2 23 unit housing, for persons for whom housing is not otherwise
2 24 available in the community, approved in accordance with
2 25 subsection 4.
2 26 3. A municipality shall not participate in this program
2 27 unless it has completed a housing needs survey, which has been
2 28 approved by the governing body of the city or county in which
2 29 the municipality is located.
2 30 4. The authority shall not enter into any agreement with a
2 31 municipality under this program unless the project has been
2 32 approved as follows:
2 33 a. The governing body of the city or county containing the
2 34 municipality shall hold a public hearing on the proposed
2 35 project not less than seven days following the publishing of
3 1 notice of the hearing in a newspaper of general circulation in
3 2 the city or county in which the proposed project is to be
3 3 located.
3 4 b. Following the public hearing, if the governing body
3 5 wishes to proceed with the project, the governing body shall
3 6 adopt a resolution approving the project. The resolution
3 7 shall provide for a reverse referendum under paragraph "c".
3 8 c. Upon the petition of ten percent of the persons who
3 9 voted in the last election for members of the governing body
3 10 of the city or county, received within thirty days of the date
3 11 of adoption of the resolution under paragraph "b", the
3 12 governing body shall direct that the proposal be submitted for
3 13 a special election to be held as early as practicable. Notice
3 14 of the election shall be given as provided in section 49.53,
3 15 for cities, or as provided in section 331.305, for counties.
3 16 The notice shall state the time and place of holding the
3 17 election and the hours when the polls will open and close, the
3 18 purpose of the election, and a description of the proposed
3 19 project. The project shall be considered approved if a
3 20 majority of the votes cast favor the project.
3 21 Sec. 3. NEW SECTION. 16.193 LOAN AGREEMENTS &endash; BONDS AND
3 22 NOTES.
3 23 1. The authority may issue its bonds and notes, the
3 24 proceeds of which shall be used to make program loans to a
3 25 municipality. The authority may enter into loan agreements
3 26 with a municipality to finance in whole or in part one or more
3 27 projects. The repayment obligation of the municipality may be
3 28 unsecured, secured by a mortgage or security agreement, or
3 29 secured by other security. The repayment obligation may be
3 30 evidenced by one or more notes of the municipality. The loan
3 31 agreement may contain terms and conditions the authority and
3 32 municipality deem advisable, including an operating deficit
3 33 agreement authorized by section 16.196.
3 34 2. The authority may issue its bonds and notes for
3 35 projects and may enter into a lending agreement or purchase
4 1 agreement with bondholders or noteholders containing the terms
4 2 and conditions of the repayment of and the security for the
4 3 bonds or notes. The authority may issue its bonds for one or
4 4 more projects secured by loan agreements related to those
4 5 projects. The authority and the bondholders or noteholders or
4 6 trustee agent designated by the authority may enter into an
4 7 agreement to provide for any of the following:
4 8 a. That the proceeds of the bonds and notes and the
4 9 investments of the proceeds may be received, held, and
4 10 disbursed by the authority or by a trustee or agent designated
4 11 by the authority.
4 12 b. That the bondholders or noteholders or a trustee or
4 13 agent designated by the authority may collect, invest, and
4 14 apply the amount payable under the loan agreements or any
4 15 other instruments securing the debt obligations under the loan
4 16 agreements.
4 17 c. That the bondholders or noteholders may enforce the
4 18 remedies provided in the loan agreements or other instruments
4 19 on their own behalf. If there is a default in the principal
4 20 of or interest on the bonds or notes or in the performance of
4 21 an agreement contained in the loan agreements or other
4 22 instruments, the payment or performance may be enforced in
4 23 accordance with the loan agreements or other instruments.
4 24 d. Other terms and conditions as deemed necessary or
4 25 appropriate by the authority.
4 26 3. The powers granted the authority under this program are
4 27 in addition to other powers contained in this chapter. All
4 28 other provisions of this chapter, except section 16.28,
4 29 subsection 4, apply to bonds or notes issued and power granted
4 30 to the authority under this program except to the extent they
4 31 are inconsistent with this section.
4 32 4. All bonds or notes issued by the authority in
4 33 connection with the program are exempt from taxation by this
4 34 state and the interest on the bonds or notes is exempt from
4 35 state income tax.
5 1 Sec. 4. NEW SECTION. 16.194 SECURITY &endash; RESERVE FUNDS &endash;
5 2 PLEDGES &endash; NONLIABILITY &endash; IRREVOCABLE CONTRACTS.
5 3 1. The authority may provide in the resolution, trust
5 4 agreement, or other instrument authorizing the issuance of its
5 5 bonds or notes pursuant to this program that the principal of,
5 6 premium, and interest on the bonds or notes are payable solely
5 7 out of the pledged receipts as designated in the resolution,
5 8 trust agreement, or other instrument authorizing the issuance
5 9 of the bonds or notes.
5 10 2. The authority may establish reserve funds to secure one
5 11 or more issues of its bonds or notes. The authority may
5 12 deposit in a reserve fund established under this section the
5 13 proceeds of the sale of its bonds or notes and other moneys
5 14 which are made available from any other source.
5 15 3. A pledge made in respect of bonds or notes shall be
5 16 valid and binding from the time the pledge is made, and the
5 17 money or property so pledged and received after the pledge by
5 18 the authority shall immediately be subject to a lien or the
5 19 pledge without physical delivery or further act, and that the
5 20 lien or the pledge shall be valid and binding as against all
5 21 parties having claims of any kind in tort, contract, or
5 22 otherwise against the authority whether or not the parties
5 23 have notice of the lien or pledge. The resolution, trust
5 24 agreement, or other instrument by which a pledge is created
5 25 need not be recorded or filed in accordance with chapter 554
5 26 to be valid, binding, or effective against any parties.
5 27 4. The members of the authority and a person executing the
5 28 bonds or notes are not liable personally on the bonds or notes
5 29 and are not subject to personal liability or accountability by
5 30 reason of the issuance of the bonds or notes.
5 31 5. The bonds or notes issued by the authority are not an
5 32 indebtedness or other liability of the state or of a political
5 33 subdivision of the state within the meaning of any
5 34 constitutional or statutory debt limitations but are special
5 35 obligations of the authority, and are payable solely out of
6 1 the pledged receipts to the extent that the pledged receipts
6 2 are designated in the resolution, trust agreement, or other
6 3 instrument of the authority authorizing the issuance of the
6 4 bonds or notes as being available as security for such bonds
6 5 or notes. The authority shall not pledge the faith or credit
6 6 of the state to the payment of any bonds or notes. The
6 7 authority shall not pledge the faith or credit of a
6 8 municipality to the payment of any bonds or notes except as
6 9 agreed to by the municipality in its loan agreement. The
6 10 issuance of any bonds or notes by the authority does not
6 11 directly, indirectly, or contingently obligate the state to
6 12 apply moneys from, or levy or pledge any form of taxation
6 13 whatever to the payment of the bonds or notes. The issuance
6 14 of any bonds or notes by the authority does not directly,
6 15 indirectly, or contingently obligate a municipality to apply
6 16 moneys from, or levy or pledge any form of taxation whatever
6 17 to the payment of the bonds or notes, except as agreed to by
6 18 the municipality in the loan agreement.
6 19 6. The state pledges to and agrees with the holders of
6 20 bonds or notes issued under the program, that the state will
6 21 not limit or alter the rights and powers vested in the
6 22 authority to fulfill the terms of a contract made by the
6 23 authority with respect to the bonds or notes, or in any way
6 24 impair the rights and remedies of the holders until the bonds
6 25 and notes, together with the interest on them including
6 26 interest on unpaid installments of interest, and all costs and
6 27 expenses in connection with an action or proceeding by or on
6 28 behalf of the holders, are fully met and discharged. The
6 29 authority may include this pledge and agreement of the state,
6 30 as it refers to holders of bonds or notes of the authority, in
6 31 a contract with the holders.
6 32 Sec. 5. NEW SECTION. 16.195 POWERS OF THE MUNICIPALITY.
6 33 1. For purposes of the program, a municipality may enter
6 34 into loan agreements and issue any type of obligations payable
6 35 from any security which it is authorized by law to issue. For
7 1 the purpose of this program, the development, ownership and
7 2 managing of a project constitutes an essential county purpose
7 3 and a county enterprise under chapter 331 and an essential
7 4 corporate purpose and a city enterprise under chapter 384.
7 5 2. To approve a loan agreement under this chapter for a
7 6 project, a municipality shall follow the authorization
7 7 procedures for the issuance of revenue bonds by cities as set
7 8 out in section 384.83. Chapter 75 shall not apply. No other
7 9 law governing the authorization and issuance of obligations by
7 10 a municipality shall apply to loan agreements entered into by
7 11 a municipality with the authority for purposes of the program.
7 12 3. A municipality may negotiate development agreements,
7 13 construction agreements and management agreements for the
7 14 project and shall not be subject to the provisions of any
7 15 other law relating to public hearings or public bidding
7 16 including, without limitation, section 331.341 and sections
7 17 384.95 through 384.103.
7 18 4. A municipality may enter into loan agreements
7 19 containing any terms with respect to the project the
7 20 municipality and authority determine, including the granting
7 21 of a mortgage on the project and a security interest in any
7 22 other properties, rights, funds, or revenues with respect to
7 23 the project, notwithstanding the provisions of any other law
7 24 to the contrary. Any provisions of chapters 331 and 384 which
7 25 limit the powers of cities and counties with respect to
7 26 revenue financing of city and county enterprises shall not
7 27 restrict the powers of a municipality to finance a project
7 28 under this program.
7 29 Sec. 6. NEW SECTION. 16.196 OPERATING DEFICIT AGREEMENT.
7 30 1. A municipality may enter into an operating deficit
7 31 agreement, as a part of or separately from the loan agreement,
7 32 in which the municipality may agree that, when requested to
7 33 pay an operating deficit reimbursement with respect to a
7 34 project, the municipality shall timely include in its budget
7 35 request, and use all reasonable and lawful means to obtain, an
8 1 appropriation from the governing body of the municipality for
8 2 each fiscal year of moneys sufficient to pay operating deficit
8 3 reimbursements defined in the operating deficit agreement for
8 4 a project for the prior fiscal year, or a projected operating
8 5 deficit for the project for the current fiscal year or
8 6 succeeding fiscal year. A municipality may also represent at
8 7 the time of execution of the operating deficit agreement that
8 8 it reasonably expects to budget and appropriate for all
8 9 operating deficit reimbursements and that the municipality
8 10 will take any action necessary to provide moneys for the
8 11 payment of such reimbursements from sources of the
8 12 municipality lawfully available for such purposes.
8 13 2. Notwithstanding subsection 1, the municipality shall
8 14 not be obligated to appropriate or otherwise provide moneys
8 15 for the payment of operating deficit reimbursements, and in
8 16 the event of nonappropriation by the municipality, the
8 17 municipality shall not be liable for general, special,
8 18 incidental, consequential, or other damage resulting from the
8 19 nonappropriation. The operating deficit agreement may provide
8 20 that in the event a municipality shall fail to pay an
8 21 operating deficit reimbursement, the municipality shall be in
8 22 default under the operating deficit agreement and such default
8 23 will constitute a default by the municipality under the loan
8 24 agreement with respect to the project.
8 25 3. If a project has an operating deficit for the prior
8 26 fiscal year for which the municipality is obligated to make an
8 27 operating deficit reimbursement pursuant to the terms of the
8 28 operating deficit agreement or loan agreement, the
8 29 municipality may reduce the amount of payment in lieu of taxes
8 30 provided in section 16.197 by the amount of the operating
8 31 deficit reimbursement and apply the savings to the payment of
8 32 the operating deficit reimbursement if the municipality
8 33 determines that there are no other uncommitted funds legally
8 34 available to pay the operating deficit reimbursement.
8 35 Sec. 7. NEW SECTION. 16.197 PAYMENTS IN LIEU OF TAXES.
9 1 1. A municipality owning housing pursuant to a project
9 2 shall annually pay out of the revenues from the project to the
9 3 state of Iowa and to the city, school district, and any other
9 4 political subdivision authorized to levy taxes against
9 5 property in the jurisdiction in which the project is located,
9 6 twenty-five percent of the amount of tax determined by
9 7 applying the tax rate of the taxing district to the assessed
9 8 value of the project, which the state, county, school district
9 9 or other political subdivision would receive if the project
9 10 were owned by a private person, any other provision of this
9 11 Code to the contrary notwithstanding. For purposes of
9 12 arriving at this tax equivalent, the property of the project
9 13 shall be valued and assessed by the assessor in whose
9 14 jurisdiction the project is located, in accordance with
9 15 chapter 441, but the municipality, the lessee on behalf of the
9 16 municipality with the municipality's consent, and other
9 17 persons authorized by chapter 441 shall be entitled to protest
9 18 any assessment in the same manner as any taxpayer. The
9 19 valuations of the project shall be included in any summation
9 20 of valuations in the taxing district for all lawful purposes.
9 21 Income from this source shall be considered under the
9 22 provision of section 384.16, subsection 1, paragraph "b".
9 23 2. Notwithstanding subsection 1, the payment in lieu of
9 24 taxes may be reduced in accordance with section 16.196 by
9 25 reason of a requirement to pay an operating deficit
9 26 reimbursement.
9 27 Sec. 8. NEW SECTION. 16.198 AVAILABILITY OF HOUSING
9 28 UNITS FOR PURCHASE BY RESIDENTS.
9 29 A municipality shall make provisions to facilitate the
9 30 eventual purchase of housing units in projects by residents,
9 31 including ultimately transferring multi-unit housing into
9 32 condominiums. The authority shall assist a municipality in
9 33 achieving this objective.
9 34 Sec. 9. Section 331.461, subsection 2, Code 1995, is
9 35 amended by adding the following new paragraph:
10 1 NEW PARAGRAPH. g. Local housing development projects
10 2 under section 16.192.
10 3 Sec. 10. Section 384.24, subsection 2, paragraph k, Code
10 4 1995, is amended to read as follows:
10 5 k. Housing for the elderly or physically handicapped and
10 6 local housing development projects under section 16.192.
10 7 SF 160
10 8 mk/cc/26
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