House File 2606 - Introduced HOUSE FILE 2606 BY PRICHARD , HUNTER , McCONKEY , MASCHER , OLDSON , STECKMAN , THEDE , B. MEYER , COHOON , GASKILL , WOLFE , DONAHUE , WINCKLER , STAED , JAMES , KURTZ , WILBURN , BEARINGER , FORBES , BENNETT , RUNNING-MARQUARDT , BRECKENRIDGE , HALL , WILLIAMS , KACENA , ABDUL-SAMAD , KRESSIG , BROWN-POWERS , OLSON , SUNDE , WESSEL-KROESCHELL , and MATSON A BILL FOR An Act providing for grants to eligible political subdivisions 1 for rehabilitation and remediation of buildings that are 2 public nuisances or are abandoned for community use, and 3 making appropriations. 4 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 5 TLSB 5347YH (6) 88 ko/jh

H.F. 2606 Section 1. Section 15.338, Code 2020, is amended to read as 1 follows: 2 15.338 Nuisance property remediation assistance —— fund. 3 1. a. The economic development authority shall establish 4 a nuisance property remediation fund pursuant to section 5 15.106A, subsection 1 , paragraph “o” , for purposes of providing 6 financial assistance to cities for the remediation of nuisance 7 properties and abandoned buildings and other structures and 8 political subdivisions for purposes of this section . The 9 authority shall administer the fund in a manner designed 10 to make funds annually available to cities and political 11 subdivisions for purposes of this section. 12 b. The authority may administer a the fund established for 13 purposes of this section as a revolving fund. The fund may 14 consist consists of any moneys appropriated by the general 15 assembly for purposes of this section and any other moneys 16 that are lawfully available to the authority, including moneys 17 transferred or deposited from other funds created pursuant to 18 section 15.106A, subsection 1 , paragraph “o” . 19 0c. For the fiscal year beginning July 1, 2020, and for each 20 fiscal year thereafter, there is appropriated from the general 21 fund of the state to the authority for deposit in the fund a sum 22 of two million dollars to be used by the authority to provide 23 grants to political subdivisions pursuant to subsection 6A. 24 c. The authority shall use any moneys specifically 25 appropriated for purposes of this section only for the purposes 26 of this section. The authority may use all other moneys in the 27 fund, including interest, earnings, recaptures, and repayments 28 for purposes of this section or the authority may transfer 29 the other moneys to other funds created pursuant to section 30 15.106A, subsection 1 , paragraph “o” . 31 d. Notwithstanding section 12C.7, subsection 2, interest 32 or earnings on moneys in the fund shall accrue to the 33 authority and shall be used for purposes of this section. 34 Notwithstanding section 8.33 , moneys in the nuisance property 35 -1- LSB 5347YH (6) 88 ko/jh 1/ 6

H.F. 2606 remediation fund at the end of each fiscal year shall not 1 revert to any other fund but shall remain in the fund for 2 expenditure for subsequent fiscal years. All repayments or 3 recaptures of financial assistance provided under this section 4 shall accrue to the authority and shall be used for purposes of 5 this section. 6 e. The authority may use not more than five percent of 7 the moneys in the fund at the beginning of the fiscal year 8 for purposes of administrative costs, finance, compliance, 9 marketing, and program support. 10 2. The authority shall use moneys in the fund to provide 11 financial assistance loans or forgivable loans to cities , 12 and to provide grants to political subdivisions, for the 13 remediation and rehabilitation of buildings that are a public 14 nuisance properties and buildings that are abandoned buildings 15 and other structures . Such financial assistance may include 16 loans or forgivable loans. The authority may provide financial 17 assistance under this section using a competitive scoring 18 process and eligibility criteria established pursuant to rules 19 adopted by the authority . 20 3. a. In providing financial assistance a loan or a 21 forgivable loan under this section, the authority may give 22 priority to cities with severe blighted areas, widespread 23 dilapidated housing stock, or high rates of low or moderate 24 income residents. 25 4. b. The authority shall enter into an agreement with 26 each city for the receipt of financial assistance a loan or 27 a forgivable loan under this section. The authority may 28 negotiate the terms of the agreement. 29 5. c. In providing financial assistance under this section , 30 the The authority shall coordinate with a city to develop a 31 plan for the use of funds a loan or a forgivable loan that 32 is consistent with the community development, housing, and 33 economic development goals of the city. The terms of the 34 agreement entered into pursuant to subsection 4 paragraph “b” 35 -2- LSB 5347YH (6) 88 ko/jh 2/ 6

H.F. 2606 and the use of financial assistance the loan or forgivable loan 1 provided under this section shall reflect the plan developed 2 based on a city’s goals. 3 6. d. If a city receives financial assistance a loan or 4 a forgivable loan under this section, the amount of any lien 5 created for costs related to the rehabilitation or remediation 6 of the property shall not include any moneys that the city 7 received pursuant to this section to rehabilitate or remediate 8 the property. 9 4. a. The authority shall use moneys in the fund pursuant 10 to subsection 1, paragraph “0c” , to provide grants to political 11 subdivisions for rehabilitation and remediation of buildings 12 that are public nuisances or abandoned for community use. 13 b. In providing a grant under this section, the authority 14 shall enter into an agreement with each political subdivision 15 prior to the political subdivision’s receipt of a grant. For a 16 political subdivision to receive a grant, the agreement must 17 require that the political subdivision provide resources, 18 including financial or in-kind, to the rehabilitation or 19 remediation project. The authority shall negotiate the terms 20 of the agreement and the agreement must specify that if, 21 after being awarded a grant, the political subdivision does 22 not comply with the agreement, all or a portion of the grant 23 received is subject to disallowance, recapture, or immediate 24 repayment. 25 c. In awarding a grant under this section, the authority 26 shall coordinate with a political subdivision to develop a plan 27 for the use of the grant that is consistent with the community 28 development goals of the political subdivision. The terms 29 of the agreement entered into pursuant to paragraph “b” and 30 the political subdivision’s use of a grant awarded under this 31 section shall reflect the plan developed. 32 d. A grant awarded to an eligible political subdivision 33 pursuant to this section shall not exceed one hundred thousand 34 dollars. A political subdivision shall not receive more than 35 -3- LSB 5347YH (6) 88 ko/jh 3/ 6

H.F. 2606 one grant under this section. 1 e. If a political subdivision is awarded a grant under 2 this section, the amount of any lien created for costs related 3 to the rehabilitation or remediation of a building that is a 4 public nuisance or that is abandoned shall not include any 5 moneys that the political subdivision received pursuant to this 6 section. 7 7. 5. The authority shall submit a report to the general 8 assembly and the governor’s office on or before January 9 31, 2019, describing the results of the program implemented 10 pursuant to this section and making recommendations for 11 additional program changes. The authority shall, by January 15 12 of each year, submit a report on the grants awarded pursuant to 13 subsection 4 to the general assembly. The report shall include 14 all of the following information for each political subdivision 15 that is awarded a grant under the program in the immediately 16 preceding calendar year: 17 a. The identity of the political subdivision. 18 b. The amount of the grant. 19 c. The address of the building that is a public nuisance or 20 abandoned that is being rehabilitated or remediated. 21 d. The financial or in-kind resources contributed by the 22 political subdivision. 23 e. The projected economic impact of the project to the 24 community. 25 f. The intended community use for the rehabilitated or 26 remediated building that is a public nuisance or that is 27 abandoned. 28 g. The completion date for the project. 29 6. As used in this section, unless the context otherwise 30 requires: 31 a. “Abandoned” means the same as defined in section 657A.1. 32 b. “Building” means the same as defined in section 657A.1. 33 c. “Political subdivision” means a city, county, township, 34 or school district. 35 -4- LSB 5347YH (6) 88 ko/jh 4/ 6

H.F. 2606 d. “Public nuisance” means the same as defined in section 1 657A.1. 2 7. The authority shall adopt rules pursuant to chapter 17A 3 to administer this section. 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 grants to eligible political 8 subdivisions for rehabilitation and remediation of buildings 9 that are public nuisances or abandoned for community use. 10 Under current law, the nuisance property remediation 11 fund established in Code section 15.338 may be used by the 12 economic development authority (authority) to provide loans 13 and forgivable loans to cities for the remediation of nuisance 14 properties and abandoned buildings and other structures. Under 15 the bill, the authority is still required to provide loans and 16 forgivable loans to cities, and in addition the bill requires 17 the authority to award grants to political subdivisions for 18 the remediation and rehabilitation of buildings that are 19 public nuisances and buildings that are abandoned. “Political 20 subdivision” is defined in the bill as a city, county, 21 township, or school district. “Public nuisance”, “abandoned”, 22 and “building” are also defined in the bill. Under current 23 law, the authority may transfer all moneys in the fund that 24 have not been appropriated, including interest, earnings, 25 recaptures, and repayments to other funds created pursuant 26 to Code section 15.106A(1)(o). The bill specifies that all 27 repayments or recaptures of financial assistance provided to 28 cities or political subdivisions accrue to the authority and 29 must be used for purposes of providing loans and forgivable 30 loans to cities, and grants to political subdivisions. 31 The bill establishes a $2 million standing appropriation 32 from the general fund of the state to the authority for 33 deposit in the fund commencing with the fiscal year beginning 34 July 1, 2020. The authority is required to use the standing 35 -5- LSB 5347YH (6) 88 ko/jh 5/ 6

H.F. 2606 appropriation to provide grants to political subdivisions 1 using a competitive scoring process and eligibility criteria 2 established pursuant to rules adopted by the authority. 3 Upon approval of a political subdivision’s application, the 4 political subdivision must enter into an agreement with the 5 authority. The agreement must contain a provision allowing 6 for all or a portion of the grant received to be subject to 7 disallowance, recapture, or immediate repayment in certain 8 circumstances as outlined in the bill. 9 The authority is required to coordinate with the political 10 subdivision to develop a plan for the use of an awarded grant 11 that is consistent with the community development goals of 12 the political subdivision. The terms of the agreement the 13 political subdivision and the authority enter into, and the use 14 of the awarded grant, must reflect the developed plan. 15 A grant awarded to an eligible political subdivision cannot 16 exceed $100,000 and an eligible political subdivision cannot 17 receive more than one grant. The bill requires the authority 18 to submit an annual report to the general assembly that 19 includes information related to grants awarded to political 20 subdivisions as outlined in the bill. 21 The authority is required to adopt rules pursuant to Code 22 chapter 17A as necessary to administer the provisions of the 23 bill. 24 The bill makes conforming changes to Code section 15.338. 25 -6- LSB 5347YH (6) 88 ko/jh 6/ 6