Senate File 488 - Introduced SENATE FILE 488 BY COMMITTEE ON WAYS AND MEANS (SUCCESSOR TO SSB 1035) (COMPANION TO HF 439 BY COMMITTEE ON ECONOMIC GROWTH) A BILL FOR An Act relating to the workforce housing tax incentives 1 program by increasing the maximum dollar amount that may be 2 allocated to the program, by requiring allocation to certain 3 housing projects, and by increasing the percentage of 4 investment for tax incentives for certain housing projects. 5 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 6 TLSB 1332SV (2) 87 aw/sc

S.F. 488 Section 1. Section 15.119, subsection 2, paragraph a, 1 subparagraph (2), Code 2017, is amended to read as follows: 2 (2) In allocating tax credits pursuant to this subsection 3 for the fiscal year beginning July 1, 2016, and ending June 30, 4 2017, the authority shall not allocate more than one hundred 5 five million dollars for purposes of this paragraph “a” . In 6 allocating tax credits pursuant to this paragraph “a” for each 7 fiscal year of the fiscal period beginning July 1, 2016 2017 , 8 and ending June 30, 2021, the authority shall not allocate more 9 than for the purposes of this paragraph “a” an amount that 10 exceeds an amount equal to the difference of one hundred five 11 million dollars for purposes of this paragraph less the amount, 12 if any, that the allocation for purposes of paragraph “g” 13 exceeds twenty million dollars for the same fiscal year . This 14 subparagraph (2) is repealed July 1, 2021. 15 Sec. 2. Section 15.119, subsection 2, paragraph a, 16 subparagraph (3), subparagraph division (a), Code 2017, is 17 amended to read as follows: 18 (a) In allocating tax credits pursuant to this subsection 19 for the fiscal year beginning July 1, 2021, and ending June 20 30, 2022, the authority shall not allocate more than for the 21 purposes of this paragraph “a” an amount that exceeds an amount 22 equal to the difference of one hundred five million dollars for 23 purposes of this paragraph less the amount, if any, that the 24 allocation for purposes of paragraph “g” exceeds twenty million 25 dollars for the same fiscal year if the aggregate amount of 26 renewable chemical production tax credits under section 15.319 27 that were awarded on or after July 1, 2018, but before July 1, 28 2021, equals or exceeds twenty-seven million dollars. 29 Sec. 3. Section 15.119, subsection 2, paragraph g, Code 30 2017, is amended to read as follows: 31 g. The workforce housing tax incentives program administered 32 pursuant to sections 15.351 through 15.356 . In allocating 33 tax credits pursuant to this subsection , the authority shall 34 not allocate more than twenty thirty million dollars for 35 -1- LSB 1332SV (2) 87 aw/sc 1/ 5

S.F. 488 purposes of this paragraph. Of the moneys allocated under this 1 paragraph, ten million dollars shall be reserved for allocation 2 to qualified housing projects in small cities, as defined in 3 section 15.352. 4 Sec. 4. Section 15.352, Code 2017, is amended by adding the 5 following new subsections: 6 NEW SUBSECTION . 3A. “Greenfield site” means a site that 7 does not meet the definition of a brownfield site or grayfield 8 site. A project proposed at a site located on previously 9 undeveloped land or agricultural land shall be presumed to be 10 a greenfield site. 11 NEW SUBSECTION . 9. “Small city” means any city or township 12 located in this state, except those located within the eleven 13 most populous counties in the state, as determined by the most 14 recent federal decennial census. For the purposes of this 15 part, a small city that is located in more than one county 16 shall be considered to be located in the county having the 17 greatest taxable base within the small city. 18 Sec. 5. Section 15.353, subsection 1, paragraph a, Code 19 2017, is amended to read as follows: 20 a. Four or more single-family dwelling units , except for a 21 project located in a small city, then two or more single-family 22 dwelling units . 23 Sec. 6. Section 15.353, subsection 2, Code 2017, is amended 24 by adding the following new paragraph: 25 NEW PARAGRAPH . 0d. For a housing project located in a 26 small city that meets program requirements under subsection 1, 27 paragraph “a” , development at a greenfield site. 28 Sec. 7. Section 15.353, subsection 2, paragraph d, 29 subparagraph (2), subparagraph division (c), Code 2017, is 30 amended to read as follows: 31 (c) The demand for projects applying under this paragraph 32 “d” compared to the demand for projects applying under 33 paragraphs “a” through “c” “0d” . 34 Sec. 8. Section 15.354, subsection 4, paragraph c, Code 35 -2- LSB 1332SV (2) 87 aw/sc 2/ 5

S.F. 488 2017, is amended to read as follows: 1 c. (1) The authority shall issue tax incentives under the 2 program on a first-come, first-served basis until the maximum 3 amount of tax incentives allocated pursuant to section 15.119, 4 subsection 2 , is reached. The authority shall maintain a list 5 of registered housing projects under the program so that if 6 the maximum aggregate amount of tax incentives is reached in 7 a given fiscal year, registered housing projects that were 8 completed but for which tax incentives were not issued shall 9 be placed on a wait list in the order the registered housing 10 projects were registered and shall be given priority for 11 receiving tax incentives in succeeding fiscal years. 12 (2) The authority shall administer allocations reserved for 13 qualified housing projects in small cities separately from the 14 general allocation in subparagraph (1). The authority shall 15 issue tax incentives for small cities under the program on a 16 first-come, first-served basis until the maximum amount of the 17 allocation reserved for small cities under section 15.119, 18 subsection 2, paragraph “g” , is reached. The authority shall 19 maintain a list of registered housing projects in small cities 20 under the program so that if the maximum aggregate amount 21 of tax incentives reserved for small cities is reached in a 22 given fiscal year, such registered housing projects that were 23 completed but for which tax incentives were not issued shall 24 be placed on a wait list in the order the registered housing 25 projects were registered and shall be given priority for 26 receiving tax incentives in succeeding fiscal years. If the 27 maximum aggregate amount of tax incentives reserved for small 28 cities is not reached in a given fiscal year, the authority may 29 issue tax incentives reserved under this subparagraph (2) to 30 other housing projects registered under subsection 2. 31 Sec. 9. Section 15.355, subsection 3, paragraph a, Code 32 2017, is amended to read as follows: 33 a. A housing business may claim a tax credit in an amount 34 not to exceed the following: 35 -3- LSB 1332SV (2) 87 aw/sc 3/ 5

S.F. 488 (1) For a housing project not located in a small city, ten 1 percent of the qualifying new investment of a housing project. 2 (2) For a housing project located in a small city, twenty 3 percent of the qualifying new investment of a housing project. 4 EXPLANATION 5 The inclusion of this explanation does not constitute agreement with 6 the explanation’s substance by the members of the general assembly. 7 This bill relates to the workforce housing tax incentives 8 program by increasing the maximum dollar amount that may be 9 allocated to the program, by requiring that a certain dollar 10 value of tax credits be allocated to housing projects in small 11 cities, and by increasing the percentage for computing tax 12 credits for such housing projects. 13 The bill raises the annual allowable tax credits allocation 14 under the program from $20 million to $30 million, but 15 maintains the economic development authority’s (authority) 16 $170 million aggregate tax credit limit. The bill requires 17 the authority to allocate at least $10 million in tax credits 18 to housing projects in small cities and to administer such 19 reserved allocations separately. If the authority does not 20 reach the $10 million for such projects in a fiscal year, the 21 bill provides that the authority may issue tax incentives from 22 the reserved allocation to registered housing projects that 23 are not located in small cities. Under the bill, a small city 24 includes any city or township not located in one of the 11 25 most populous counties in the state, as determined by the most 26 recent federal decennial census. Under the bill, a small city 27 that is located in more than one county is considered to be 28 located in the county having the greatest taxable base within 29 the small city. 30 The bill provides that a housing project in a small city 31 that results in two or more new single-family dwelling units 32 at a greenfield site, as defined in the bill, may receive tax 33 incentives under the program, equaling up to 20 percent of the 34 qualifying new investment. 35 -4- LSB 1332SV (2) 87 aw/sc 4/ 5