Senate Study Bill 1035 - Introduced SENATE/HOUSE FILE _____ BY (PROPOSED ECONOMIC DEVELOPMENT AUTHORITY BILL) 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 1332XD (11) 87 aw/sc

S.F. _____ H.F. _____ Section 1. Section 15.119, subsection 2, paragraph g, Code 1 2017, is amended to read as follows: 2 g. The workforce housing tax incentives program administered 3 pursuant to sections 15.351 through 15.356 . In allocating 4 tax credits pursuant to this subsection , the authority shall 5 not allocate more than twenty thirty million dollars for 6 purposes of this paragraph. Of the moneys allocated under this 7 paragraph, ten million dollars shall be reserved for allocation 8 to qualified housing projects in small cities, as defined in 9 section 15.352. 10 Sec. 2. Section 15.352, Code 2017, is amended by adding the 11 following new subsections: 12 NEW SUBSECTION . 3A. “Greenfield site” means a site that 13 does not meet the definition of a brownfield site or grayfield 14 site. A project proposed at a site located on previously 15 undeveloped land or agricultural land shall be presumed to be 16 a greenfield site. 17 NEW SUBSECTION . 9. “Small city” means any city or township 18 located in this state, except those located within the eleven 19 most populous counties in the state, as determined by the most 20 recent federal decennial census. For the purposes of this 21 part, a small city that is located in more than one county 22 shall be considered to be located in the county having the 23 greatest taxable base within the small city. 24 Sec. 3. Section 15.353, subsection 1, paragraph a, Code 25 2017, is amended to read as follows: 26 a. Four or more single-family dwelling units , except for a 27 project located in a small city, then two or more single-family 28 dwelling units . 29 Sec. 4. Section 15.353, subsection 2, Code 2017, is amended 30 by adding the following new paragraph: 31 NEW PARAGRAPH . 0d. For a housing project located in a 32 small city that meets program requirements under subsection 1, 33 paragraph “a” , development at a greenfield site. 34 Sec. 5. Section 15.353, subsection 2, paragraph d, 35 -1- LSB 1332XD (11) 87 aw/sc 1/ 4

S.F. _____ H.F. _____ subparagraph (2), subparagraph division (c), Code 2017, is 1 amended to read as follows: 2 (c) The demand for projects applying under this paragraph 3 “d” compared to the demand for projects applying under 4 paragraphs “a” through “c” “0d” . 5 Sec. 6. Section 15.354, subsection 4, paragraph c, Code 6 2017, is amended to read as follows: 7 c. (1) The authority shall issue tax incentives under the 8 program on a first-come, first-served basis until the maximum 9 amount of tax incentives allocated pursuant to section 15.119, 10 subsection 2 , is reached. The authority shall maintain a list 11 of registered housing projects under the program so that if 12 the maximum aggregate amount of tax incentives is reached in 13 a given fiscal year, registered housing projects that were 14 completed but for which tax incentives were not issued shall 15 be placed on a wait list in the order the registered housing 16 projects were registered and shall be given priority for 17 receiving tax incentives in succeeding fiscal years. 18 (2) The authority shall administer allocations reserved for 19 qualified housing projects in small cities separately from the 20 general allocation in subparagraph (1). The authority shall 21 issue tax incentives for small cities under the program on a 22 first-come, first-served basis until the maximum amount of the 23 allocation reserved for small cities under section 15.119, 24 subsection 2, paragraph “g” , is reached. The authority shall 25 maintain a list of registered housing projects in small cities 26 under the program so that if the maximum aggregate amount 27 of tax incentives reserved for small cities is reached in a 28 given fiscal year, such registered housing projects that were 29 completed but for which tax incentives were not issued shall 30 be placed on a wait list in the order the registered housing 31 projects were registered and shall be given priority for 32 receiving tax incentives in succeeding fiscal years. If the 33 maximum aggregate amount of tax incentives reserved for small 34 cities is not reached in a given fiscal year, the authority may 35 -2- LSB 1332XD (11) 87 aw/sc 2/ 4

S.F. _____ H.F. _____ issue tax incentives reserved under this subparagraph (2) to 1 other housing projects registered under subsection 2. 2 Sec. 7. Section 15.355, subsection 3, paragraph a, Code 3 2017, is amended to read as follows: 4 a. A housing business may claim a tax credit in an amount 5 not to exceed the following: 6 (1) For a housing project not located in a small city, ten 7 percent of the qualifying new investment of a housing project. 8 (2) For a housing project located in a small city, twenty 9 percent of the qualifying new investment of a housing project. 10 EXPLANATION 11 The inclusion of this explanation does not constitute agreement with 12 the explanation’s substance by the members of the general assembly. 13 This bill relates to the workforce housing tax incentives 14 program by increasing the maximum dollar amount that may be 15 allocated to the program, by requiring that a certain dollar 16 value of tax credits be allocated to housing projects in small 17 cities, and by increasing the percentage for computing tax 18 credits for such housing projects. 19 The bill raises the annual allowable tax credits allocation 20 under the program from $20 million to $30 million, but 21 maintains the economic development authority’s (authority) 22 $170 million aggregate tax credit limit. The bill requires 23 the authority to allocate at least $10 million in tax credits 24 to housing projects in small cities and to administer such 25 reserved allocations separately. If the authority does not 26 reach the $10 million for such projects in a fiscal year, the 27 bill provides that the authority may issue tax incentives from 28 the reserved allocation to registered housing projects that 29 are not located in small cities. Under the bill, a small city 30 includes any city or township not located in one of the 11 31 most populous counties in the state, as determined by the most 32 recent federal decennial census. Under the bill, a small city 33 that is located in more than one county is considered to be 34 located in the county having the greatest taxable base within 35 -3- LSB 1332XD (11) 87 aw/sc 3/ 4

S.F. _____ H.F. _____ the small city. 1 The bill provides that a housing project in a small city 2 that results in two or more new single-family dwelling units 3 at a greenfield site, as defined in the bill, may receive tax 4 incentives under the program, equaling up to 20 percent of the 5 qualifying new investment. 6 -4- LSB 1332XD (11) 87 aw/sc 4/ 4