SENATE FILE 2140

BY  CHELGREN

A BILL FOR

An Act relating to Iowa’s urban renewal law by modifying provisions relating to the duration of urban renewal areas and ordinances providing for a division of revenue, requiring voter approval for ordinances establishing a division of revenue, and including effective date provisions.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

    Section 1.  Section 403.17, subsection 10, Code 2011, is amended to read as follows:
   10.  “Economic development area” means an area of a municipality designated by the local governing body as appropriate for commercial and industrial enterprises, public improvements related to housing and residential development, or construction of housing and residential development for low and moderate income families, including single or multifamily housing. If an urban renewal plan for an urban renewal area
 
adopted on or after January 1, 1995, but before the effective date of this Act, is based upon a finding that the area is an economic development area and that no part contains slum or blighted conditions, then the division of revenue provided in section 403.19, if adopted prior to the effective date of this Act, and stated in the plan shall be limited to twenty years from the calendar year following the calendar year in which the municipality first certifies to the county auditor the amount of any loans, advances, indebtedness, or bonds which qualify for payment from the division of revenue provided in section 403.19. Such designated
 
An economic development area shall not include agricultural land, including land which is part of a century farm, unless the owner of the agricultural land or century farm agrees to include the agricultural land or century farm in the urban renewal area. For the purposes of this subsection, “century farm” means a farm in which at least forty acres of such farm have been held in continuous ownership by the same family for one hundred years or more.
    Sec. 2.  Section 403.19, Code Supplement 2011, is amended by adding the following new subsections:
   NEW SUBSECTION.  2A.  An ordinance adopted by a municipality on or after the effective date of this Act providing for a division of revenue under this section shall not become effective within the boundaries of a school district or effective against any property tax levied by any public body on real property within the boundaries of that school district unless approved by the voters of the school district at the next general election. The ordinance shall be submitted by the governing body of the municipality on its own motion to the voters of each school district located in whole or in part within the area proposed to be subject to the division of revenue. If a majority of those voting on the question within the school district approves the ordinance, the ordinance shall become effective within the boundaries of the school district that has approved the ordinance and shall, subject to the limitations of subsection 2, be effective against all property taxes levied by any public body on real property within the boundaries of that school district. Notice of the election shall be given by publication as prescribed in section 49.53 in a newspaper of general circulation within each local school district where voting is to occur.
   NEW SUBSECTION.  2B.  Except as provided in section 403.22, an ordinance providing for a division of revenue under this section that is adopted on or after the effective date of this Act shall be limited to twenty years from the calendar year following the calendar year in which the municipality first certifies to the county auditor the amount of any loans, advances, indebtedness, or bonds, which qualify for payment from the division of revenue. The urban renewal area, including all applicable urban renewal plans, projects, and ordinances shall terminate and be of no further force and effect following the twenty-year period provided in this subsection.
   NEW SUBSECTION.  2C.  An ordinance providing for a division of revenue in effect on the effective date of this Act that is not limited in duration under either section 403.17, subsection 10, or section 403.22, subsection 5, shall terminate and be of no further force and effect not later than June 30, 2032. The urban renewal area, including all applicable urban renewal plans, projects, and ordinances, shall terminate and be of no further force and effect on the date the division of revenue ordinance terminates under this subsection.
    Sec. 3.  EFFECTIVE UPON ENACTMENT.  This Act, being deemed of immediate importance, takes effect upon enactment.
EXPLANATION
   This bill provides that an ordinance adopted by a municipality on or after the effective date of the bill providing for a division of revenue under Code section 403.19 (tax increment financing) shall not become effective within the boundaries of a school district or effective against any property tax levied by any public body on real property within the boundaries of that school district unless approved by the voters of the school district at the next general election. Under the bill, if a majority of those voting on the question within the school district approves the ordinance, the ordinance shall become effective within the boundaries of the school district that has approved the ordinance and shall be effective against all property taxes levied by any public body on real property within the boundaries of that school district, except those levies excluded under current Code section 403.19(2).
   The bill provides that except for certain divisions of revenue for public improvements related to housing and residential development, an ordinance providing for a division of revenue that is adopted on or after the effective date of the bill is limited to 20 years from the calendar year following the calendar year in which the municipality first certifies to the county auditor the amount of any loans, advances, indebtedness, or bonds, which qualify for payment from the division of revenue. Following the expiration of the 20-year limitation period, the urban renewal area, including all applicable urban renewal plans, projects, and ordinances shall terminate and be of no further force and effect.
   The bill also provides that a division of revenue ordinance in effect on the effective date of the bill that is not limited in duration under either Code section 403.17(10)(20-year limitation), or Code section 403.22(5)(10-year limitation), shall terminate and be of no further force and effect not later than June 30, 2032. The urban renewal area, including all applicable urban renewal plans, projects, and ordinances, related to such ordinance shall terminate and be of no further force and effect on the date the division of revenue ordinance terminates.
   The bill takes effect upon enactment.