House File 782 - Introduced
HOUSE FILE
BY MASCHER
Passed House, Date Passed Senate, Date
Vote: Ayes Nays Vote: Ayes Nays
Approved
A BILL FOR
1 An Act making changes to the law relating to urban renewal and
2 tax increment financing and including effective and
3 applicability date provisions.
4 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
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PAG LIN
1 1 Section 1. Section 403.5, subsection 2, unnumbered
1 2 paragraph 2, Code 2005, is amended to read as follows:
1 3 Prior to its approval of an the public hearing on a
1 4 proposed urban renewal plan which provides for a division of
1 5 revenue pursuant to section 403.19, the municipality shall
1 6 mail the proposed plan by regular mail to the affected taxing
1 7 entities. The municipality shall include with the proposed
1 8 plan notification of a consultation to be held between the
1 9 municipality and affected taxing entities prior to the public
1 10 hearing on the urban renewal plan. Each affected taxing
1 11 entity may appoint a representative to attend the
1 12 consultation. The consultation may include a discussion of
1 13 the estimated growth in valuation of taxable property included
1 14 in the proposed urban renewal area, the fiscal impact of the
1 15 division of revenue on the affected taxing entities, the
1 16 estimated impact on the provision of services by each of the
1 17 affected taxing entities in the proposed urban renewal area,
1 18 and the duration of any bond issuance included in the plan.
1 19 The designated representative of the affected taxing entity
1 20 may make written recommendations for modification to the
1 21 proposed division of revenue no later than seven days
1 22 following the date of the consultation. The representative of
1 23 the municipality shall, no later than seven fourteen days
1 24 prior to the public hearing on the urban renewal plan
1 25 following the date of the consultation, submit a written
1 26 response to the affected taxing entity addressing the
1 27 recommendations for modification to the proposed division of
1 28 revenue.
1 29 Sec. 2. Section 403.5, subsection 2, Code 2005, is amended
1 30 by adding the following new unnumbered paragraph:
1 31 NEW UNNUMBERED PARAGRAPH. If the municipality is a city,
1 32 no later than twenty=one days following the date of the
1 33 consultation, the county board of supervisors of each county
1 34 that is an affected taxing entity shall, by resolution,
1 35 approve or reject the proposed plan. If the board of
2 1 supervisors of each county that is an affected taxing district
2 2 approves the plan, the city may proceed with the public
2 3 hearing on the plan, pursuant to subsection 3, and with
2 4 approval of the plan, pursuant to subsection 4. If any board
2 5 of supervisors of a county that is an affected taxing district
2 6 rejects the plan, the city shall not proceed with the proposed
2 7 plan.
2 8 Sec. 3. Section 403.5, subsections 5 and 6, Code 2005, are
2 9 amended to read as follows:
2 10 5. An urban renewal plan may be modified amended at any
2 11 time: Provided, that if modified amended after the lease or
2 12 sale by the municipality of real property in the urban renewal
2 13 project area, such modification amendment may be conditioned
2 14 upon such approval of the owner, lessee, or successor in
2 15 interest as the municipality may deem advisable, and in any
2 16 event such modification amendment shall be subject to such
2 17 rights at law or in equity as a lessee or purchaser, or a
2 18 lessee's or purchaser's successor or successors in interest,
2 19 may be entitled to assert. The An urban renewal project may
2 20 be added to an urban renewal plan only by an amendment to the
2 21 plan. Territory may be added to, or severed from, an urban
2 22 renewal area only by an amendment to the urban renewal plan.
2 23 When amending an urban renewal plan, the municipality shall
2 24 comply with the notification and consultation process provided
2 25 in this section prior to the approval of any amendment or
2 26 modification to an adopted urban renewal plan if such
2 27 amendment or modification provides for refunding bonds or
2 28 refinancing resulting in an increase in debt service or
2 29 provides for the issuance of bonds or other indebtedness, to
2 30 be funded primarily in the manner provided in section 403.19,
2 31 or if such amendment proposes to add a project to an urban
2 32 renewal plan or proposes to add territory to an urban renewal
2 33 area or proposes to sever territory from an urban renewal
2 34 area.
2 35 If a city proposes an amendment to an urban renewal plan to
3 1 sever territory from an urban renewal area, each county where
3 2 the territory to be severed is located must, within thirty
3 3 days of the conclusion of the consultation process, adopt a
3 4 resolution approving or rejecting the proposed amendment. If
3 5 a resolution approving the proposed amendment to an urban
3 6 renewal plan is received from each county where the territory
3 7 to be severed is located, or if the board of supervisors of
3 8 each county where the territory to be severed is located takes
3 9 no action within the thirty=day time period, the governing
3 10 body of the city may proceed with the proposed amendment. If
3 11 one or more resolutions rejecting the proposed amendment to
3 12 sever the territory is received, the governing body of the
3 13 city shall not proceed with the proposed amendment to the
3 14 urban renewal plan.
3 15 If an urban renewal plan is amended and the amendment to
3 16 the plan provides for the addition of territory to the urban
3 17 renewal area, the assessment year established for the
3 18 territory added for purposes of dividing revenue under section
3 19 403.19 shall be the assessment year determined pursuant to
3 20 section 403.19, subsection 8.
3 21 6. Upon the approval by a municipality of an urban renewal
3 22 plan or of any modification thereof amendment to an urban
3 23 renewal plan, such plan or modification amendment shall be
3 24 deemed to be in full force and effect for the respective urban
3 25 renewal area, and the municipality may then cause such plan or
3 26 modification amendment to be carried out in accordance with
3 27 its terms.
3 28 Sec. 4. Section 403.5, Code 2005, is amended by adding the
3 29 following new subsections:
3 30 NEW SUBSECTION. 8. An urban renewal area designated as a
3 31 slum or blighted area and established before the effective
3 32 date of this Act is limited to twenty years in duration
3 33 counting from the effective date of this Act. An urban
3 34 renewal area designated as a slum or blighted area established
3 35 on or after the effective date of this Act is limited in
4 1 duration to twenty years counting from July 1 of the first
4 2 fiscal year in which the municipality receives moneys from a
4 3 division of revenue pursuant to section 403.19 for purposes of
4 4 such urban renewal area. An amendment to an urban renewal
4 5 plan shall not result in an extension of the durational
4 6 limitation imposed in this subsection.
4 7 NEW SUBSECTION. 9. An urban renewal area designated as an
4 8 economic development area shall be limited in duration to
4 9 twenty years counting from July 1 of the first fiscal year in
4 10 which the municipality receives moneys from a division of
4 11 revenue pursuant to section 403.19 for purposes of such urban
4 12 renewal area. An amendment to an urban renewal plan shall not
4 13 result in an extension of the durational limitation imposed in
4 14 this subsection.
4 15 Sec. 5. Section 403.6, subsection 6, unnumbered paragraph
4 16 1, Code 2005, is amended to read as follows:
4 17 Within its area of operation, to make or have made all
4 18 surveys and planning necessary to the carrying out of the
4 19 purposes of this chapter, and to contract with any person in
4 20 making and carrying out of such planning, and to adopt or
4 21 approve, modify and amend such planning. Such planning may
4 22 include, without limitation:
4 23 Sec. 6. Section 403.6, subsection 6, paragraph b, Code
4 24 2005, is amended to read as follows:
4 25 b. Urban renewal plans adopted or amended pursuant to the
4 26 requirements of section 403.5;
4 27 Sec. 7. Section 403.6, subsection 12, Code 2005, is
4 28 amended to read as follows:
4 29 12. To approve and amend urban renewal plans, subject to
4 30 the requirements of section 403.5.
4 31 Sec. 8. Section 403.14, subsection 2, paragraph b, Code
4 32 2005, is amended to read as follows:
4 33 b. The power to approve urban renewal plans and
4 34 modifications amendments thereof;
4 35 Sec. 9. Section 403.17, subsection 10, Code 2005, is
5 1 amended to read as follows:
5 2 10. "Economic development area" means an area of a
5 3 municipality designated by the local governing body as
5 4 appropriate for commercial and industrial enterprises, public
5 5 improvements related to housing and residential development,
5 6 or construction of housing and residential development for low
5 7 and moderate income families, including single or multifamily
5 8 housing. If an urban renewal plan for an urban renewal area
5 9 is based upon a finding that the area is an economic
5 10 development area and that no part contains slum or blighted
5 11 conditions, then the division of revenue provided in section
5 12 403.19 and stated in the plan shall be limited to twenty years
5 13 from the calendar year following the calendar year in which
5 14 the municipality first certifies to the county auditor the
5 15 amount of any loans, advances, indebtedness, or bonds which
5 16 qualify for payment from the division of revenue provided in
5 17 section 403.19. Such designated area shall not include
5 18 agricultural land, including land which is part of a century
5 19 farm, unless the owner of the agricultural land or century
5 20 farm agrees to include the agricultural land or century farm
5 21 in the urban renewal area. For the purposes of this
5 22 subsection, "century farm" means a farm in which at least
5 23 forty acres of such farm have been held in continuous
5 24 ownership by the same family for one hundred years or more.
5 25 Sec. 10. Section 403.19, subsection 2, Code 2005, is
5 26 amended to read as follows:
5 27 2. That portion of the taxes each year in excess of such
5 28 amount shall be allocated to and when collected be paid into a
5 29 special fund of the municipality to pay the principal of and
5 30 interest on loans, moneys advanced to, or indebtedness,
5 31 whether funded, refunded, assumed, or otherwise, including
5 32 bonds issued under the authority of section 403.9, subsection
5 33 1, incurred by the municipality to finance or refinance, in
5 34 whole or in part, an urban renewal project within the area,
5 35 and to provide assistance for low and moderate income family
6 1 housing as provided in section 403.22, except that taxes for
6 2 the regular and voter=approved physical plant and equipment
6 3 levy of a school district imposed pursuant to section 298.2
6 4 and taxes for the payment of bonds and interest of each taxing
6 5 district must be collected against all taxable property within
6 6 the taxing district without limitation by the provisions of
6 7 this subsection. However, all or a portion of the taxes for
6 8 the physical plant and equipment levy shall be paid by the
6 9 school district to the municipality if the auditor certifies
6 10 to the school district by July 1 the amount of such levy that
6 11 is necessary to pay the principal and interest on bonds issued
6 12 by the municipality to finance an urban renewal project, which
6 13 bonds were issued before July 1, 2001. Indebtedness incurred
6 14 to refund bonds issued prior to July 1, 2001, shall not be
6 15 included in the certification. Such school district shall pay
6 16 over the amount certified by November 1 and May 1 of the
6 17 fiscal year following certification to the school district.
6 18 Unless and until the total assessed valuation of the taxable
6 19 property in an urban renewal area exceeds the total assessed
6 20 value of the taxable property in such area as shown by the
6 21 last equalized assessment roll referred to in subsection 1,
6 22 all of the taxes levied and collected upon the taxable
6 23 property in the urban renewal area shall be paid into the
6 24 funds for the respective taxing districts as taxes by or for
6 25 the taxing districts in the same manner as all other property
6 26 taxes. When such loans, advances, indebtedness, and bonds, if
6 27 any, and interest thereon, have been paid, all moneys
6 28 thereafter received from taxes upon the taxable property in
6 29 such urban renewal area shall be paid into the funds for the
6 30 respective taxing districts in the same manner as taxes on all
6 31 other property.
6 32 Sec. 11. Section 403.19, subsection 5, Code 2005, is
6 33 amended to read as follows:
6 34 5. a. A municipality shall certify to the county auditor
6 35 on or before December 1 November 15 of each year the amount of
7 1 loans, advances, indebtedness, or bonds which qualify for
7 2 payment from the special fund referred to in subsection 2, and
7 3 the timely filing of the certificate shall make it a duty of
7 4 the auditor to provide for the division of taxes in each
7 5 subsequent year until the amount of the loans, advances,
7 6 indebtedness, or bonds is paid to the special fund the amount
7 7 certified for the fiscal year beginning in the following
7 8 calendar year, subject to paragraph "c". In any year, the
7 9 county auditor shall, upon receipt of a certified request from
7 10 a municipality filed on or before December 1 November 15,
7 11 increase the amount to be allocated under subsection 1 in
7 12 order to reduce the amount to be allocated in the following
7 13 fiscal year to the special fund, to the extent that the
7 14 municipality does not request allocation to the special fund
7 15 of the full portion of taxes which could be collected. Upon
7 16 receipt of a certificate from a municipality, the auditor
7 17 shall mail a copy of the certificate to each affected taxing
7 18 district.
7 19 b. The certificate shall be filed on a form prescribed by
7 20 the department of management. The form shall be designed in
7 21 such a way as to allow the county auditor to track the
7 22 following information for each urban renewal area:
7 23 (1) The total amount of debt incurred for urban renewal
7 24 projects since the establishment of the urban renewal area.
7 25 (2) The total amount of debt retired for urban renewal
7 26 projects since the establishment of the urban renewal area.
7 27 (3) The total amount of debt outstanding for urban renewal
7 28 projects in the urban renewal area.
7 29 (4) The amount of debt incurred for urban renewal projects
7 30 in the urban renewal area for which payment is due in the
7 31 fiscal year beginning in the following calendar year.
7 32 (5) The payment schedule or schedules for each debt
7 33 issuance for urban renewal projects in the urban renewal area.
7 34 (6) The type and amount of each debt issuance for urban
7 35 renewal projects in the urban renewal area.
8 1 (7) The total amount of revenue received for deposit in
8 2 the special fund pursuant to subsection 2.
8 3 (8) The amount of all other revenue used to retire debt
8 4 incurred to finance urban renewal projects in the urban
8 5 renewal area.
8 6 c. When all debt, if any, and interest thereon, has been
8 7 paid, revenues from taxes levied on taxable property in an
8 8 urban renewal area shall not be divided pursuant to this
8 9 section and shall not be deposited in the special fund under
8 10 subsection 2.
8 11 d. For purposes of this section, "debt" includes all
8 12 loans, advances, indebtedness, bonds, or other obligations
8 13 which qualify for payment from the special fund referred to in
8 14 subsection 2. For purposes of this section, "indebtedness"
8 15 includes, but is not limited to, a written agreement to
8 16 suspend, abate, exempt, rebate, refund, or reimburse property
8 17 taxes or to provide a grant for property taxes paid.
8 18 Sec. 12. Section 403.19, Code 2005, is amended by adding
8 19 the following new subsection:
8 20 NEW SUBSECTION. 8. If an urban renewal plan is amended
8 21 and the amendment to the plan provides for the addition of
8 22 territory to the urban renewal area, the assessment year for
8 23 the territory added for purposes of dividing revenue under
8 24 this section shall be the assessment year beginning January 1
8 25 of the calendar year preceding the calendar year in which the
8 26 municipality adopted the amendment.
8 27 Sec. 13. Section 403.20, Code 2005, is amended by striking
8 28 the section and inserting in lieu thereof the following:
8 29 403.20 PERCENTAGE OF ADJUSTMENT CONSIDERED IN VALUE
8 30 ASSESSMENT.
8 31 The reduction to actual value calculated under section
8 32 441.21, subsection 4 or 5, shall be applied to the applicable
8 33 class of property to the base value in the proportion that the
8 34 base value bears to the total actual value of the urban
8 35 renewal area and shall be applied to the applicable class of
9 1 property to the incremental value in the proportion that the
9 2 incremental value bears to the total actual value of the urban
9 3 renewal area.
9 4 For purposes of this section, "base value" means the value
9 5 calculated under section 403.19, subsection 1, paragraph "a",
9 6 and "incremental value" means the value calculated under
9 7 section 403.19, subsection 2.
9 8 Sec. 14. EFFECTIVE DATE. This Act, being deemed of
9 9 immediate importance, takes effect upon enactment.
9 10 Sec. 15. APPLICABILITY.
9 11 1. The sections of this Act amending section 403.5,
9 12 subsection 2, apply to urban renewal plans proposed on or
9 13 after the effective date of this Act.
9 14 2. The remainder of this Act applies to urban renewal
9 15 areas and urban renewal projects established, and urban
9 16 renewal plans adopted, before, on, or after the effective date
9 17 of this Act.
9 18 EXPLANATION
9 19 This bill makes changes to the law relating to urban
9 20 renewal and tax increment financing.
9 21 The bill provides that before a municipality that is a city
9 22 may hold a public hearing on, and issue approval for, a
9 23 proposed urban renewal plan, the plan shall be approved, by
9 24 resolution, of the board of supervisors of each county
9 25 affected by the plan. If the proposed plan is rejected by any
9 26 affected county, the city shall not proceed with the proposed
9 27 plan. This portion of the bill applies to urban renewal plans
9 28 proposed on or after the effective date of the bill.
9 29 The bill provides that an urban renewal project may be
9 30 added to an urban renewal plan only by an amendment to the
9 31 plan. The bill also provides that territory may be added to,
9 32 or severed from, an urban renewal area only by an amendment to
9 33 the urban renewal plan. In the case of severance of territory
9 34 from the urban renewal area by a municipality that is a city,
9 35 the bill requires the approval of the county where the
10 1 territory is located before the city may proceed with the
10 2 amendment to sever territory. The bill provides that if
10 3 territory is added to an urban renewal area, the assessment
10 4 year established for the territory added for purposes of
10 5 dividing revenue is the assessment year beginning January 1 of
10 6 the calendar year preceding the calendar year in which the
10 7 amendment is adopted.
10 8 The bill limits the duration of urban renewal areas
10 9 designated as slum and blighted areas. If such an urban
10 10 renewal area was established before the effective date of the
10 11 bill, the duration is 20 years from the effective date of the
10 12 bill. If such an urban renewal area is established on or
10 13 after the effective date of the bill, the duration is 20 years
10 14 counting from July 1 of the first fiscal year in which the
10 15 municipality receives tax increment revenues for purposes of
10 16 the urban renewal area.
10 17 The bill changes the applicability of the durational
10 18 limitation in current law for urban renewal areas designated
10 19 as economic development areas. Under current law, economic
10 20 development urban renewal plans established on or after
10 21 January 1, 1995, are limited to 20 years in duration. The
10 22 bill provides that an economic development urban renewal area
10 23 established before, on, or after the effective date of the
10 24 bill is limited in duration to 20 years counting from July 1
10 25 of the first fiscal year in which the municipality receives
10 26 tax increment revenues for purposes of the urban renewal area.
10 27 The bill changes the date that a municipality must certify
10 28 debt to the county auditor from December 1 of each year to
10 29 November 15 of each year. The bill provides that the
10 30 certificate shall be filed on a form prescribed by the
10 31 department of management. The bill also requires additional
10 32 information relating to urban renewal debt to be included on
10 33 the form containing the certification. The bill defines
10 34 "debt" and "indebtedness" for purposes of certification to the
10 35 county auditor.
11 1 The bill requires that the assessment limitation applied to
11 2 classes of property shall be applied to the base and
11 3 incremental valuation in an urban renewal area in the
11 4 proportion that the base value of the urban renewal area bears
11 5 to the total valuation in the urban renewal area and in the
11 6 proportion that the incremental value of the urban renewal
11 7 area bears to the total valuation in the urban renewal area.
11 8 This portion of the bill takes effect upon enactment and
11 9 applies to urban renewal areas and urban renewal projects
11 10 established, and urban renewal plans adopted, before, on, or
11 11 after the effective date of the bill.
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