House File 1037 S-3174 Amend House File 1037, as passed by the House, as follows: 1 1. By striking everything after the enacting clause and 2 inserting: 3 < DIVISION I 4 HOUSING 5 Section 1. Section 15A.1, subsection 1, paragraph b, Code 6 2025, is amended to read as follows: 7 b. For purposes of this chapter , “economic development” 8 means private or joint public and private investment involving 9 the creation of new jobs and income or the retention of 10 existing jobs and income that would otherwise be lost or the 11 provision of workforce housing . 12 Sec. 2. Section 15A.1, subsection 2, Code 2025, is amended 13 by adding the following new paragraph: 14 NEW PARAGRAPH . e. Development policies that advance the 15 development of workforce housing. 16 Sec. 3. Section 403.17, subsection 14, Code 2025, is amended 17 to read as follows: 18 14. “Low or and moderate income families” means those 19 families, including single person households, earning no 20 more than eighty percent of the higher of the median family 21 income of the county or the statewide nonmetropolitan area as 22 determined by the latest United States department of housing 23 and urban development, section 8 income guidelines. 24 Sec. 4. Section 403.17, Code 2025, is amended by adding the 25 following new subsection: 26 NEW SUBSECTION . 14A. “Low and moderate income family 27 housing” means housing for low and moderate income families and 28 includes housing that meets the requirements of section 15.353. 29 DIVISION II 30 DIVISION OF REVENUE —— SCHOOL FOUNDATION LEVY 31 Sec. 5. Section 403.19, subsection 2, paragraph a, Code 32 2025, is amended to read as follows: 33 a. That portion of the taxes each year in excess of such 34 amount shall be allocated to and when collected be paid into a 35 -1- HF 1037.2005 (2) 91 jm/md 1/ 6 #1.

special fund of the municipality to pay the principal of and 1 interest on loans, moneys advanced to, or indebtedness, whether 2 funded, refunded, assumed, or otherwise, including bonds 3 issued under the authority of section 403.9, subsection 1 , 4 incurred by the municipality to finance or refinance, in whole 5 or in part, an urban renewal project within the area, and to 6 provide assistance for low and moderate income family housing 7 as provided in section 403.22 . However, except as provided 8 in paragraph “b” , taxes for the regular and voter-approved 9 physical plant and equipment levy of a school district imposed 10 pursuant to section 298.2 , foundation property taxes of a 11 school district imposed under section 257.3, and taxes for the 12 instructional support program of a school district imposed 13 pursuant to section 257.19 , taxes for the payment of bonds 14 and interest of each taxing district, and taxes imposed under 15 section 346.27, subsection 22 , related to joint county-city 16 buildings shall be collected against all taxable property 17 within the taxing district without limitation by the provisions 18 of this subsection . 19 Sec. 6. APPLICABILITY. This division of this Act applies 20 to property taxes due and payable in fiscal years beginning 21 on or after July 1, 2027, that are levied against any of the 22 following: 23 1. Property located in an urban renewal area for which the 24 ordinance providing for a division of revenue takes effect on 25 or after January 1, 2026. 26 2. Property annexed or otherwise included in an urban 27 renewal area after the effective date of the ordinance 28 providing for a division of revenue if the annexation or 29 inclusion occurs on or after January 1, 2026. 30 DIVISION III 31 DIVISION OF REVENUE —— CHAPTER 422D PROPERTY TAX LEVY 32 Sec. 7. Section 403.19, subsection 2, paragraph a, Code 33 2025, is amended to read as follows: 34 a. That portion of the taxes each year in excess of such 35 -2- HF 1037.2005 (2) 91 jm/md 2/ 6

amount shall be allocated to and when collected be paid into a 1 special fund of the municipality to pay the principal of and 2 interest on loans, moneys advanced to, or indebtedness, whether 3 funded, refunded, assumed, or otherwise, including bonds 4 issued under the authority of section 403.9, subsection 1 , 5 incurred by the municipality to finance or refinance, in whole 6 or in part, an urban renewal project within the area, and to 7 provide assistance for low and moderate income family housing 8 as provided in section 403.22 . However, except as provided 9 in paragraph “b” , taxes for the regular and voter-approved 10 physical plant and equipment levy of a school district imposed 11 pursuant to section 298.2 and taxes for the instructional 12 support program of a school district imposed pursuant to 13 section 257.19 , taxes for the payment of bonds and interest 14 of each taxing district, taxes for emergency medical services 15 imposed pursuant to chapter 422D, and taxes imposed under 16 section 346.27, subsection 22 , related to joint county-city 17 buildings shall be collected against all taxable property 18 within the taxing district without limitation by the provisions 19 of this subsection . 20 Sec. 8. APPLICABILITY. This division of this Act applies 21 to property taxes due and payable in fiscal years beginning on 22 or after July 1, 2026. 23 DIVISION IV 24 LIMITATIONS ON DIVISION OF REVENUE 25 Sec. 9. Section 357H.9, subsection 1, Code 2025, is amended 26 by adding the following new paragraph: 27 NEW PARAGRAPH . 0f. Section 403.19, subsection 2, paragraph 28 “e” , shall not apply to a division of revenue under this 29 section. 30 Sec. 10. Section 403.19, subsection 2, Code 2025, is amended 31 by adding the following new paragraph: 32 NEW PARAGRAPH . e. For urban renewal areas for which an 33 ordinance providing for a division of revenue is not limited 34 in duration under section 403.17, subsection 10, or section 35 -3- HF 1037.2005 (2) 91 jm/md 3/ 6

403.22, subsection 5, after fifteen years following the 1 effective date of this division of this Act or after fifteen 2 years from the calendar year following the calendar year in 3 which the municipality first certifies to the county auditor 4 the amount of any loans, advances, indebtedness, or bonds which 5 qualify for payment from the division of revenue, whichever 6 is later, the amount determined under paragraph “a” that may 7 be paid into the municipality’s special fund shall not exceed 8 seventy-five percent of the amount otherwise determined under 9 paragraph “a” but for this paragraph and such excess amounts 10 shall be allocated and paid to the respective taxing districts 11 in the same manner as amounts under subsection 1. However, 12 beginning with the sixth year that such an urban renewal area 13 is subject to this paragraph, the amount determined under 14 paragraph “a” that may be paid into the municipality’s special 15 fund shall not exceed sixty percent of the amount otherwise 16 determined under paragraph “a” but for this paragraph and such 17 excess amounts shall be allocated and paid to the respective 18 taxing districts in the same manner as amounts under subsection 19 1. 20 DIVISION V 21 URBAN RENEWAL AREA HOUSING AND RESIDENTIAL DEVELOPMENT 22 REQUIREMENTS 23 Sec. 11. Section 403.22, subsection 1, Code 2025, is amended 24 by adding the following new paragraph: 25 NEW PARAGRAPH . d. (1) For municipalities of any population 26 size, and notwithstanding any minimum low and moderate income 27 family housing requirement, if the public improvement project 28 is approved on or after July 1, 2025, but before July 1, 2026, 29 and is related to housing and residential development in an 30 economic development area containing property that has been 31 located entirely within the corporate limits of a city for 32 twenty years or more, the amount to be provided for low and 33 moderate income family housing for such projects shall not be 34 required to be greater than an amount equal to twenty percent 35 -4- HF 1037.2005 (2) 91 jm/md 4/ 6

of the original project cost. 1 (2) In addition, and notwithstanding subsection 5, the 2 division of the revenue under section 403.19 for each project 3 under this paragraph shall be limited to tax collections for 4 twenty fiscal years beginning with the second fiscal year after 5 the year in which the municipality first certifies to the 6 county auditor the amount of any loans, advances, indebtedness, 7 or bonds which qualify for payment from the division of the 8 revenue in connection with the project. 9 DIVISION VI 10 URBAN RENEWAL AREA LIMITATIONS 11 Sec. 12. Section 331.403, subsection 3, paragraph b, Code 12 2025, is amended by adding the following new subparagraph: 13 NEW SUBPARAGRAPH . (22) For purposes of determining 14 compliance with section 403.5A, the percentage of actual value 15 of all property within the county’s area of operation, as 16 defined in section 403.17, that is located in an urban renewal 17 area established by the municipality and in effect for the 18 applicable fiscal year. 19 Sec. 13. Section 384.22, subsection 2, paragraph b, Code 20 2025, is amended by adding the following new subparagraph: 21 NEW SUBPARAGRAPH . (22) For purposes of determining 22 compliance with section 403.5A, the percentage, of actual 23 value of all property within the city’s area of operation, as 24 defined in section 403.17, that is located in an urban renewal 25 area established by the municipality and in effect for the 26 applicable fiscal year. 27 Sec. 14. NEW SECTION . 403.5A Percentage of municipal value 28 within urban renewal areas —— limitations. 29 For fiscal years beginning on or after July 1, 2026, 30 and notwithstanding any provision of this chapter to the 31 contrary, each municipality shall be subject to the following 32 limitations: 33 1. For the fiscal year beginning July 1, 2026, the actual 34 value in the aggregate of all property located in urban 35 -5- HF 1037.2005 (2) 91 jm/md 5/ 6

renewal areas established and in effect for the fiscal year 1 by a municipality shall not exceed ninety-six and one-fourth 2 percent of the total actual value of all property within the 3 municipality’s area of operation. 4 2. For each fiscal year beginning on or after July 1, 2027, 5 but before July 1, 2047, the actual value in the aggregate of 6 all property located in urban renewal areas established and in 7 effect for the fiscal year by a municipality shall not exceed 8 the limitation percentage of the total actual value of all 9 property within the municipality’s area of operation. For 10 purposes of this subsection, the “limitation percentage” for 11 each fiscal year shall be a percentage equal to the limitation 12 percentage applicable under this subsection for the immediately 13 preceding fiscal year, or for the fiscal year beginning July 1, 14 2027, the percentage applicable under subsection 1, minus three 15 and three-fourths percent. 16 3. For each fiscal year beginning on or after July 1, 2047, 17 the actual value in the aggregate of all property located in 18 urban renewal areas established and in effect for the fiscal 19 year by a municipality shall not exceed twenty percent of the 20 total actual value of all property within the municipality’s 21 area of operation. > 22 2. Title page, by striking lines 1 and 2 and inserting < An 23 Act relating to economic development and housing by modifying 24 provisions concerning economic development programs and 25 modifying provisions concerning Iowa’s urban renewal law, and 26 including applicability provisions. > 27 ______________________________ DAN DAWSON -6- HF 1037.2005 (2) 91 jm/md 6/ 6 #2.