SF 408 (LSB 2116SV (3) 85)

SENATE FILE 408

BY  COMMITTEE ON ECONOMIC GROWTH

(SUCCESSOR TO SSB 1217)

A BILL FOR

An Act relating to the Iowa finance authority and making an appropriation.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

DIVISION I

IOWA JOBS BOARD
    Section 1.  Section 12.87, subsection 12, Code 2013, is amended to read as follows:
   12.  Neither the treasurer of state, the Iowa jobs board
 
finance authority, nor any person acting on behalf of the treasurer of state or the Iowa jobs board
 
finance authority while acting within the scope of their employment or agency, is subject to personal liability resulting from carrying out the powers and duties conferred by this section and sections 12.88 through 12.90.
    Sec. 2.  Section 16.193, subsection 1, Code 2013, is amended to read as follows:
   1.  The Iowa finance authority, subject to approval by the Iowa jobs board, shall adopt administrative rules pursuant to chapter 17A necessary to administer the Iowa jobs program and Iowa jobs II program. The authority shall provide the board with assistance in implementing administrative functions,
 
be responsible for providing technical assistance and application assistance to applicants under the programs, negotiating contracts, and providing project follow up. The authority, in cooperation with the board, may conduct negotiations on behalf of the board with applicants regarding terms and conditions applicable to awards under the program.
    Sec. 3.  Section 16.194, subsection 2, Code 2013, is amended to read as follows:
   2.  A city or county or a public organization in this state may submit an application to the Iowa jobs board
 
authority for financial assistance for a local infrastructure competitive grant for an eligible project under the program, notwithstanding any limitation on the state’s percentage in funding as contained in section 29C.6, subsection 17.
    Sec. 4.  Section 16.194, subsection 4, unnumbered paragraph 1, Code 2013, is amended to read as follows:
   The board
 
authority shall consider the following criteria in evaluating eligible projects to receive financial assistance under the program:
    Sec. 5.  Section 16.194, subsection 7, Code 2013, is amended to read as follows:
   7.  In order for a project to be eligible to receive financial assistance from the board
 
authority, the project must be a public construction project pursuant to subsection 1 with a demonstrated substantial local, regional, or statewide economic impact.
    Sec. 6.  Section 16.194, subsection 8, unnumbered paragraph 1, Code 2013, is amended to read as follows:
   The board
 
authority shall not approve an application for assistance for any of the following purposes:
    Sec. 7.  Section 16.194, subsection 9, paragraph b, Code 2013, is amended to read as follows:
   b.  Any portion of an amount allocated for projects that remains unexpended or unencumbered one year after the allocation has been made may be reallocated to another project category, at the discretion of the board
 
authority. The board
 
authority shall ensure that all bond proceeds be expended within three years from when the allocation was initially made.
    Sec. 8.  Section 16.194, subsection 10, Code 2013, is amended to read as follows:
   10.  The board
 
authority shall ensure that funds obligated under this section are coordinated with other federal program funds received by the state, and that projects receiving funds are located in geographically diverse areas of the state.
    Sec. 9.  Section 16.194A, subsections 2, 7, 9, and 10, Code 2013, are amended to read as follows:
   2.  A city or county in this state that applies the smart planning principles and guidelines pursuant to sections 18B.1 and 18B.2 may submit an application to the Iowa jobs board
 
authority for financial assistance for a local infrastructure competitive grant for an eligible project under the program, notwithstanding any limitation on the state’s percentage in funding as contained in section 29C.6, subsection 17.
   7.  In order for a project to be eligible to receive financial assistance from the board
 
authority, the project must be a public construction project pursuant to subsection 1 with a demonstrated substantial local, regional, or statewide economic impact.
   9.  Any portion of an amount allocated for projects that remains unexpended or unencumbered one year after the allocation has been made may be reallocated to another project category, at the discretion of the board
 
authority. The board
 
authority shall ensure that all bond proceeds be expended within three years from when the allocation was initially made.
   10.  The board
 
authority shall ensure that funds obligated under this section are coordinated with other federal program funds received by the state, and that projects receiving funds are located in geographically diverse areas of the state.
    Sec. 10.  Section 16.194A, subsection 4, unnumbered paragraph 1, Code 2013, is amended to read as follows:
   The board
 
authority shall consider the following criteria in evaluating eligible projects to receive financial assistance under the program:
    Sec. 11.  Section 16.194A, subsection 8, unnumbered paragraph 1, Code 2013, is amended to read as follows:
   The board
 
authority shall not approve an application for assistance for any of the following purposes:
    Sec. 12.  Section 16.195, Code 2013, is amended to read as follows:
   16.195  Iowa jobs program application review.
   1.  Applications for assistance under the Iowa jobs program and Iowa jobs II program shall be submitted to the Iowa finance authority
 
for review and approval. The authority shall provide a staff review and evaluation of applications to the Iowa jobs program review committee referred to in subsection 2 and to the Iowa jobs board.
   2.  A review committee composed of members of the board as determined by the board shall review Iowa jobs program applications submitted to the board and make recommendations regarding the applications to the board. When reviewing the applications, the review committee and the authority shall consider the project criteria specified in sections 16.194 and 16.194A. The board
 
authority shall develop the appropriate level of transparency regarding project fund allocations.
   3.  Upon approval of an application for financial assistance under the program, the board
 
authority shall notify the treasurer of state regarding the amount of moneys needed to satisfy the award of financial assistance and the terms of the award. The treasurer of state shall notify the Iowa finance authority any time moneys are disbursed to a recipient of financial assistance under the program.
    Sec. 13.  Section 16.196, Code 2013, is amended to read as follows:
   16.196  Iowa jobs restricted capitals fund ——
 
fund appropriations.
   1.  An Iowa jobs restricted capitals fund is created and established as a separate and distinct fund in the state treasury. The fund consists of moneys appropriated from the revenue bonds capitals fund created in section 12.88. The moneys in the fund are appropriated to the Iowa jobs board for purposes of the Iowa jobs program established in section 16.194. Moneys in the fund shall not be subject to appropriation for any other purpose by the general assembly, but shall be used only for the purposes of the Iowa jobs program. The treasurer of state shall act as custodian of the fund and disburse moneys contained in the fund. The fund shall be administered by the board which shall make allocations from the fund consistent with the purposes of the Iowa jobs program.
   2.

1.  There is appropriated from the revenue bonds capitals fund created in section 12.88, to the Iowa jobs restricted capitals fund
 
authority, for the fiscal year beginning July 1, 2009, and ending June 30, 2010, one hundred sixty-five million dollars to be allocated as follows:
   a.  One hundred eighteen million five hundred thousand dollars for competitive grants for local infrastructure projects relating to disaster rebuilding, reconstruction and replacement of local buildings, flood control and flood protection, and future flood prevention public projects. An applicant for a local infrastructure grant shall not receive more than fifty million dollars in financial assistance from the fund.
   b.  Forty-six million five hundred thousand dollars for disaster relief and mitigation and local infrastructure grants for the following renovation and construction projects, notwithstanding any limitation on the state’s percentage participation in funding as contained in section 29C.6, subsection 17:
   (1)  For grants to a county with a population between one hundred eighty-nine thousand and one hundred ninety-six thousand in the latest preceding certified federal census, to be distributed as follows:
   (a)  Ten million dollars for the construction of a new, shared facility between nonprofit human service organizations serving the public, especially the needs of low-income Iowans, including those displaced as a result of the disaster of 2008.
   (b)  Five million dollars for the construction or renovation of a facility for a county-funded workshop program serving the public and particularly persons with mental illness or developmental disabilities.
   (2)  For grants to a city with a population between one hundred ten thousand and one hundred twenty thousand in the latest preceding certified federal census, to be distributed as follows:
   (a)  Five million dollars for an economic redevelopment project benefiting the public by improving energy efficiency and the development of alternative and renewable energy technologies.

   (b)  Ten million dollars for a museum serving the public and dedicated to the preservation of an eastern European cultural heritage through the collection, exhibition, preservation, and interpretation of historical artifacts.
   (c)  Five million dollars for a theater serving the public and promoting culture, entertainment, and tourism.
   (d)  Five million dollars for a public library.
   (e)  Five million dollars for a public works building.
   (3)  One million five hundred thousand dollars, to be distributed as follows:
   (a)  Five hundred thousand dollars to a city with a population between six hundred and six hundred fifty in the latest preceding certified federal census, for a public fire station.
   (b)  Five hundred thousand dollars to a city with a population between one thousand four hundred and one thousand five hundred in the latest preceding certified federal census, for a public fire station.
   (c)  Five hundred thousand dollars for a city with a population between seven thousand eight hundred and seven thousand eight hundred fifty, for a public fire station.
   3.

2.  Grant awards for a project under subsection 2
 
1, paragraph “b”, are contingent upon submission of a plan for each project by the applicable county or city governing board or in the case of a project submitted pursuant to subsection 2
 
1, paragraph “b”, subparagraph (2), subparagraph division (b), by the board of directors, to the Iowa jobs board
 
authority, no later than September 1, 2009, detailing a description of the project, the plan to rebuild, and the amount or percentage of federal, state, local, or private matching moneys which will be or have been provided for the project. Funds not utilized in accordance with subsection 2, paragraph “b”, due to failure to file a plan by the September 1 deadline
 
1, shall revert to the Iowa jobs restricted
 
revenue bonds capitals fund to be available for local infrastructure competitive grants. A grant recipient under subsection 2
 
1, paragraph “b”, shall not be precluded from applying for a local infrastructure competitive grant pursuant to this section and section 16.195.
   4.  Moneys in the fund are not subject to section 8.33. Notwithstanding section 12C.7, subsection 2, interest or earnings on moneys in the fund shall be credited to the fund.
   5.

3.  Annually, on or before January 15 of each year, the board
 
authority shall report to the legislative services agency and the department of management the status of all projects receiving moneys from the fund completed or in progress. The report shall include a description of the project, the progress of work completed, the total estimated cost of the project, a list of all revenue sources being used to fund the project, the amount of funds expended, the amount of funds obligated, and the date the project was completed or an estimated completion date of the project, where applicable.
   6.

4.  Payment of moneys appropriated from the fund shall be made in a manner that does not adversely affect the tax-exempt status of any outstanding bonds issued by the treasurer of state.
    Sec. 14.  Section 16.197, Code 2013, is amended to read as follows:
   16.197  Limitation of liability.
   A member of the Iowa jobs board, a person acting on behalf of the board while acting within the scope of their employment or agency,
 
The authority or the treasurer of state, shall not be subject to personal liability resulting from carrying out the powers and duties of the board
 
authority or the treasurer, as applicable, in sections 16.192
 
16.193 through 16.196.
    Sec. 15.  IOWA JOBS BOARD —— TRANSITION PROVISIONS —— LIMITATION OF LIABILITY.
   1.  Any contract or agreement issued or entered into by the Iowa jobs board relating to the provisions of this division of this Act, in effect on the effective date of this division of this Act, shall continue in full force and effect and any responsibility of the board relative to the contracts or agreements as provided in those contracts or agreements shall be transferred to the Iowa finance authority.
   2.  A member of the Iowa jobs board or a person acting on behalf of the board while acting within the scope of that person’s employment or agency shall not be subject to personal liability resulting from carrying out the powers and duties of the board prior to the effective date of this division of this Act, as applicable, in sections 12.87 through 12.90 and in sections 16.192 through 16.196, Code 2013.
    Sec. 16.  REPEAL.  Sections 16.191 and 16.192, Code 2013, are repealed.

DIVISION II

TITLE GUARANTY
    Sec. 17.  Section 16.1, subsection 1, paragraph ad, subparagraph (7), Code 2013, is amended to read as follows:
   (7)  The
 
Iowa title guaranty program.
    Sec. 18.  Section 16.2A, subsection 1, Code 2013, is amended to read as follows:
   1.  A title guaranty division is created within the authority.

The division may also be referred to as Iowa title guaranty. The powers of the division relating to the issuance of title guaranties are vested in and shall be exercised by a division board of five members appointed by the governor subject to confirmation by the senate. The membership of the board shall include an attorney, an abstractor, a real estate broker, a representative of a mortgage lender, and a representative of the housing development industry. The executive director of the authority shall appoint an attorney as director of the title guaranty division, who shall serve as an ex officio member of the board. The appointment of and compensation for the division director are exempt from the merit system provisions of chapter 8A, subchapter IV.
    Sec. 19.  Section 16.91, subsections 1, 3, and 4, Code 2013, are amended to read as follows:
   1.  The authority through the title guaranty division shall initiate and operate a program in which the division shall offer guaranties of real property titles in this state. The terms, conditions, and form of the guaranty contract shall be forms approved by the division board. The division shall fix a charge for the guaranty in an amount sufficient to permit the program to operate on a self-sustaining basis, including payment of administrative costs and the maintenance of an adequate reserve against claims under the
 
Iowa title guaranty program. A title guaranty fund is created in the office of the treasurer of state. Funds collected under this program shall be placed in the title guaranty fund and are available to pay all claims, necessary reserves and all administrative costs of the
 
Iowa title guaranty program. Moneys in the fund shall not revert to the general fund and interest on the moneys in the fund shall be deposited in the housing trust fund established in section 16.181 and shall not accrue to the general fund. If the authority board in consultation with the division board determines that there are surplus funds in the title guaranty fund after providing for adequate reserves and operating expenses of the division, the surplus funds shall be transferred to the housing assistance fund created pursuant to section 16.40.
   3.  With the approval of the authority board the division and its board shall consult with the insurance division of the department of commerce in developing a guaranty contract acceptable to the secondary market and developing any other feature of the program with which the insurance division may have special expertise. The insurance division shall establish the amount for a loss reserve fund. Except as provided in this subsection, the
 
Iowa title guaranty program is not subject to the jurisdiction of or regulation by the insurance division or the commissioner of insurance.
   4.  Each participating attorney and abstractor may be required to pay an annual participation fee to be eligible to participate in the
 
Iowa title guaranty program. The fee, if any, shall be set by the division, subject to the approval of the authority.
    Sec. 20.  Section 16.91, subsection 5, paragraph a, subparagraph (2), Code 2013, is amended to read as follows:
   (2)  Additionally, each participating abstractor is required to own or lease, and maintain and use in the preparation of abstracts, an up-to-date abstract title plant including tract indices for real estate for each county in which abstracts are prepared for real property titles guaranteed by the division. The tract indices shall contain a reference to all instruments affecting the real estate which are recorded in the office of the county recorder, and shall commence not less than forty years prior to the date the abstractor commences participation in the
 
Iowa title guaranty program. However, a participating attorney providing abstract services continuously from November 12, 1986, to the date of application, either personally or through persons under the attorney’s supervision and control is exempt from the requirements of this subparagraph.
    Sec. 21.  Section 16.91, subsection 8, Code 2013, is amended to read as follows:
   8.  The authority shall adopt rules pursuant to chapter 17A that are necessary for the implementation of the
 
Iowa title guaranty program as established by the division and that have been approved by the authority.
    Sec. 22.  Section 16.92, subsection 1, paragraph g, Code 2013, is amended to read as follows:
   g.  “Participating abstractor” means an abstractor participating in the
 
Iowa title guaranty program.
    Sec. 23.  Section 447.13, subsection 1, Code 2013, is amended to read as follows:
   1.  The cost of serving the notice, including the cost of sending certified mail notices, and the cost of publication under section 447.10, if publication is required, shall be added to the amount necessary to redeem. The cost of a record search shall also be added to the amount necessary to redeem. However, if the certificate holder is other than a county, the search must be performed by an abstractor who is an active participant in the
 
Iowa title guaranty program under section 16.91 or by an attorney licensed to practice law in the state of Iowa, and the amount of the cost of the record search that may be added to the amount necessary to redeem shall not exceed three hundred dollars.

DIVISION III

IOWA FINANCE AUTHORITY
    Sec. 24.  Section 7C.4A, subsection 5, Code 2013, is amended to read as follows:
   5.  Eighteen percent of the state ceiling shall be allocated to bonds issued by political subdivisions to finance a qualified industry or industries for the manufacturing, processing, or assembly of agricultural or manufactured products even though the processed products may require further treatment before delivery to the ultimate consumer. A single project allocated a portion of the state ceiling pursuant to this subsection shall not receive an allocation in excess of ten
 
twenty million dollars in any calendar year.
    Sec. 25.  Section 16.5, subsection 1, paragraph o, Code 2013, is amended to read as follows:
   o.  Contract
 
directly with architects, engineers, attorneys, accountants, housing construction and finance experts, and other advisors. However, the authority may enter into contracts or agreements for such services with local, state, or federal governmental agencies.
    Sec. 26.  Section 16.26, Code 2013, is amended by adding the following new subsections:
   NEW SUBSECTION.  10.  In connection with any financing which involves an out-of-state issuer issuing bonds, notes, or other obligations for facilities located in the state, the authority is designated as the only governmental unit in the state that may conduct the public hearing required by section 147(f) of the federal Internal Revenue Code, as defined in section 422.3, and the governor of Iowa is designated as the applicable elected representative pursuant to section 147(f) of the federal Internal Revenue Code, as defined in section 422.3.
   NEW SUBSECTION.  11.  All bonds or notes issued by the authority in connection with its single family and multifamily programs are exempt from taxation by this state, and the interest on the bonds or notes is exempt from state income tax.
    Sec. 27.  Section 16.102, Code 2013, is amended to read as follows:
   16.102  Establishment of bond bank program —— bonds and notes —— projects.
   1.  The authority may assist the development and expansion of family farming, soil conservation, housing, and business in the state through the establishment of the Iowa economic development bond bank program. The authority may issue its bonds or notes, or series of bonds or notes for the purpose of defraying the cost of one or more projects and make secured and unsecured loans for the acquisition and construction of projects on terms the authority determines
 
regardless of location.
   2.  For purposes of this section, “project” includes real or personal property connected with a facility that is located outside of the state if at least fifty percent of the financing for the program shall be used in the state and if the authority has conclusively determined that the entity financing or refinancing property located outside the state, or an affiliate thereof, is also engaged in the financing or refinancing of property located within the state, or, alternatively, the entity seeking the financing or refinancing, or an affiliate thereof, maintains a presence within the state, and financing or refinancing the property located outside the state would promote the economy of the state for the benefit of the health, welfare, safety, trade, commerce, industry, or economy of the people of the state.
EXPLANATION
   This bill concerns the Iowa finance authority.
   Division I eliminates the Iowa jobs board and provides that any duties or responsibilities of the Iowa jobs board shall become the responsibility of the Iowa finance authority. The division also provides transition provisions relative to any contracts or agreements entered into by the Iowa jobs board and provides for a limitation of personal liability for actions by a member or agent of the board taken prior to the effective date of the division relative to the duties of the board.
   Division II renames the title guaranty program as the Iowa title guaranty program. The bill also allows the title guaranty division to be referred to as Iowa title guaranty.
   Division III concerns bond activity and the Iowa finance authority.
   Code section 7C.4A(5), concerning the allocation of the state ceiling on bonds to bonds issued by a political subdivision, is amended to increase the amount any one project may receive from private activity bonds from $10 million to $20 million.
   Code section 16.5, describing the general powers of the Iowa finance authority, is amended. The bill grants the power to the authority to contract directly with architects, engineers, attorneys, and other advisors.
   Code section 16.26, concerning bonds and notes, is amended. The bill provides that for certain bonds, notes, or other obligations, the authority is designated as the governmental unit that may conduct the public hearing required by the federal Internal Revenue Code and the governor of Iowa is designated as the applicable elected representative pursuant to the Internal Revenue Code. In addition, the bill allows for bonds issued for the single family and multifamily programs to be exempt from state income tax.
   Code section 16.102, concerning the bond bank program, is amended to allow projects for property located outside of the state if at least 50 percent of the financing for the program shall be used in the state and, either the entity financing the property outside the state is also financing property located within the state or the entity maintains a presence in the state and financing the property outside the state would benefit the state.