House File 772 - Introduced HOUSE FILE 772 BY COMMITTEE ON WAYS AND MEANS (SUCCESSOR TO HSB 204) A BILL FOR An Act creating an empower rural Iowa Act to provide incentives 1 for broadband and workforce housing, and including 2 applicability provisions. 3 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 4 TLSB 1824HV (2) 88 ko/jh

H.F. 772 DIVISION I 1 TITLE OF ACT 2 Section 1. TITLE OF ACT. This Act shall be known and may be 3 cited as the “Empower Rural Iowa Act”. 4 DIVISION II 5 BROADBAND 6 Sec. 2. Section 8B.1, Code 2019, is amended by adding the 7 following new subsection: 8 NEW SUBSECTION . 4A. “Facilitate” means a communication 9 service provider’s ability to provide broadband service at 10 or above the download and upload speeds specified in the 11 definition of targeted service area in this section to a home, 12 farm, school, or business within a commercially reasonable 13 time and at a commercially reasonable price upon request by a 14 consumer. 15 Sec. 3. Section 8B.1, subsection 12, Code 2019, is amended 16 to read as follows: 17 12. “Targeted service area” means a United States census 18 bureau census block located in this state, including any crop 19 operation located within the census block, within which no 20 communications service provider offers or facilitates broadband 21 service at or above twenty-five megabits per second of download 22 speed and three megabits per second of upload speed as of 23 July 1, 2015 the download and upload speeds identified by the 24 federal communications commission pursuant to section 706 of 25 the federal Telecommunications Act of 1996, as amended . 26 Sec. 4. Section 8B.10, subsection 1, Code 2019, is amended 27 to read as follows: 28 1. The determination of whether a communications service 29 provider offers or facilitates broadband service meeting the 30 download or upload speeds specified in the definition of 31 targeted service area in section 8B.1 shall be determined 32 or ascertained by reference to broadband availability maps 33 or data sources that are widely accepted for accuracy and 34 available for public review and comment and that are identified 35 -1- LSB 1824HV (2) 88 ko/jh 1/ 21

H.F. 772 by the office by rule. The office shall periodically make 1 renewed determinations of whether a communications service 2 provider offers or facilitates broadband service at or above 3 the download or upload speeds specified in the definition of 4 targeted service area in section 8B.1, which shall, to the 5 extent updated maps and data sources are available at the time, 6 include making such determinations prior to each round of grant 7 applications solicited by the office pursuant to section 8B.11. 8 Sec. 5. Section 8B.11, subsection 1, Code 2019, is amended 9 to read as follows: 10 1. The office shall administer a broadband grant program 11 designed to award reduce or eliminate unserved and underserved 12 areas in the state, leveraging federal funds and public and 13 private partnerships where possible, by awarding grants to 14 communications service providers that reduce or eliminate 15 targeted service areas by installing broadband infrastructure 16 that facilitates broadband service in targeted service areas 17 at or above the download and upload speeds specified in 18 the definition of targeted service area in section 8B.1, in 19 accordance with this section. 20 Sec. 6. Section 8B.11, subsection 2, paragraph c, Code 2019, 21 is amended to read as follows: 22 c. Notwithstanding section 8.33 , moneys in the fund 23 that remain unencumbered or unobligated at the close of the 24 fiscal year shall not revert but shall remain available for 25 expenditure for the purposes designated until the close of 26 the succeeding fiscal year three years following the last 27 day of the fiscal year in which the funds were originally 28 appropriated . 29 Sec. 7. Section 8B.11, subsection 3, Code 2019, is amended 30 to read as follows: 31 3. Communications service providers may apply to the office 32 for a grant pursuant to this section for the installation of 33 broadband infrastructure that facilitates broadband service at 34 or above twenty-five megabits per second of download speed and 35 -2- LSB 1824HV (2) 88 ko/jh 2/ 21

H.F. 772 three megabits per second of upload speed in targeted service 1 areas at or above the download and upload speeds specified in 2 the definition of targeted service area in section 8B.1 . The 3 office shall include representatives from schools, communities, 4 agriculture, industry, and other areas as appropriate to review 5 and recommend grant awards. The office shall conduct an 6 open application review process that includes an opportunity 7 for public comment on applications and include shall make 8 available a public internet site for applications, results, and 9 performance. 10 Sec. 8. Section 8B.11, subsection 4, Code 2019, is amended 11 to read as follows: 12 4. a. The office shall award grants on a competitive 13 basis for the installation of broadband infrastructure that 14 facilitates broadband service in targeted service areas at 15 or above the download and upload speeds specified in the 16 definition of targeted service area in section 8B.1, after 17 considering the following: 18 (1) The relative need for broadband infrastructure in the 19 area and the existing broadband service speeds , including 20 whether the project serves a rural area or areas . 21 (2) The applicant’s total proposed budget for the project, 22 including the amount or percentage of local or federal matching 23 funds, if any, any funding obligations shared between public 24 and private entities, and the percentage of funding provided 25 directly from the applicant. 26 (3) The relative download and upload speeds of proposed 27 projects for all applicants. 28 (4) The specific product attributes resulting from the 29 proposed project, including technologies that provide higher 30 qualities of service, such as service levels, latency, and 31 other service attributes as determined by the office. 32 (2) (5) The percentage of the homes, farms, schools, and 33 businesses in the targeted service area that will be provided 34 access to broadband service. 35 -3- LSB 1824HV (2) 88 ko/jh 3/ 21

H.F. 772 (3) (6) The geographic diversity of the project areas of 1 all the applicants. 2 (4) (7) The economic impact of the project to the area. 3 (5) The applicant’s total proposed budget for the project, 4 including the amount or percentage of local match, if any. 5 (6) (8) Other factors the office deems relevant. 6 b. In considering the factors listed in paragraph “a” 7 for awarding grants pursuant to this section, the office 8 shall afford the greatest weight to the factors described in 9 paragraph “a” , subparagraphs (1) through (3). 10 b. c. Except as otherwise provided in this section , the 11 office shall not evaluate applications based on the office’s 12 knowledge of the applicant except for the information provided 13 in obtained by the office during the application process or 14 period for public comment . 15 Sec. 9. Section 8B.11, subsections 7 and 8, Code 2019, are 16 amended to read as follows: 17 7. The office shall not award a grant pursuant to this 18 section on or after July 1, 2020 2025 . 19 8. The office shall may adopt rules pursuant to chapter 17A 20 interpreting this chapter or necessary for administering this 21 chapter , including but not limited to rules relating to the 22 broadband grant program process, management, and measurements 23 as deemed necessary by the office. 24 Sec. 10. Section 8B.11, Code 2019, is amended by adding the 25 following new subsection: 26 NEW SUBSECTION . 9. The office shall adopt rules 27 establishing procedures to allow aggrieved applicants an 28 opportunity to challenge the office’s award of grants under 29 this section. 30 Sec. 11. Section 427.1, subsection 40, paragraphs a and b, 31 Code 2019, are amended to read as follows: 32 a. The owner of broadband infrastructure shall be entitled 33 to an exemption from taxation to the extent provided in this 34 subsection for assessment years beginning before January 1, 35 -4- LSB 1824HV (2) 88 ko/jh 4/ 21

H.F. 772 2022 2027 . For the purposes of Unless the context otherwise 1 requires, the words and phrases used in this subsection , 2 “broadband infrastructure” and “targeted service area” mean the 3 same as shall have the same meaning as the words and phrases 4 used in chapter 8B, including but not limited to the words and 5 phrases defined in section 8B.1 . 6 b. The exemption shall apply to the installation of 7 broadband infrastructure that facilitates broadband service 8 at or above twenty-five megabits per second of download speed 9 and three megabits per second of upload speed the download 10 and upload speeds specified in the definition of targeted 11 service area in section 8B.1 commenced and completed on or 12 after July 1, 2015, and before July 1, 2020 2025 , in a targeted 13 service area, and used to deliver internet services to the 14 public. A person claiming an exemption under this subsection 15 shall certify to the local assessor prior to commencement of 16 the installation that the broadband installation of broadband 17 infrastructure will take place facilitate broadband service 18 at or above the download and upload speeds specified in the 19 definition of targeted service area in section 8B.1 within a 20 targeted service area and shall specify the current number of 21 homes, farms, schools, and businesses in the targeted service 22 area that were offered broadband service and the download and 23 upload speeds available prior to the broadband infrastructure 24 installation for which the exemption is claimed and the number 25 of homes, farms, schools, and businesses in the targeted 26 service area that will be offered broadband service and the 27 download and upload speeds that will be available as a result 28 of installation of the broadband infrastructure for which the 29 exemption is claimed. 30 Sec. 12. Section 427.1, subsection 40, paragraph f, 31 subparagraph (1), subparagraph division (d), Code 2019, is 32 amended to read as follows: 33 (d) Certification from the office of the chief information 34 officer pursuant to section 8B.10 that the installation is 35 -5- LSB 1824HV (2) 88 ko/jh 5/ 21

H.F. 772 being performed or was completed will facilitate broadband 1 service at or above the download and upload speeds specified 2 in the definition of targeted service area in section 8B.1 in 3 a targeted service area. Certification from the office of 4 the chief information officer that broadband infrastructure 5 installed in a targeted service area facilitates broadband 6 service at or above twenty-five megabits per second of download 7 speed and three megabits per second of upload speed. 8 Sec. 13. Section 427.1, subsection 40, paragraph i, Code 9 2019, is amended to read as follows: 10 i. This subsection is repealed July 1, 2024 2030 . 11 DIVISION III 12 WORKFORCE HOUSING TAX INCENTIVE PROGRAM 13 Sec. 14. Section 15.119, subsection 2, paragraph g, Code 14 2019, is amended to read as follows: 15 g. The workforce housing tax incentives program administered 16 pursuant to sections 15.351 through 15.356 . In allocating 17 tax credits pursuant to this subsection , the authority shall 18 not allocate more than twenty twenty-five million dollars for 19 purposes of this paragraph. Of the moneys allocated under 20 this paragraph, five ten million dollars shall be reserved for 21 allocation to qualified housing projects in small cities, as 22 defined in section 15.352 , that are registered on or after July 23 1, 2017. 24 Sec. 15. Section 15.352, subsection 10, Code 2019, is 25 amended to read as follows: 26 10. “Small city” means any city or township located in this 27 state, except those located wholly within one or more of the 28 eleven most populous counties in the state, as determined by 29 the most recent federal decennial census population estimates 30 issued by the United States bureau of census . For the purposes 31 of this part, a small city that is located in more than one 32 county shall be considered to be located in the county having 33 the greatest taxable base within the small city. 34 Sec. 16. Section 15.354, subsection 1, paragraph a, Code 35 -6- LSB 1824HV (2) 88 ko/jh 6/ 21

H.F. 772 2019, is amended to read as follows: 1 a. A housing business seeking workforce housing tax 2 incentives provided in section 15.355 shall make application to 3 the authority in the manner prescribed by the authority. The 4 authority may accept applications on a continuous basis during 5 one or more annual application periods to be determined by the 6 authority by rule . 7 Sec. 17. Section 15.354, subsection 2, Code 2019, is amended 8 to read as follows: 9 2. Registration. Application review —— tax incentive award. 10 a. All completed applications shall be reviewed and scored 11 on a competitive basis by the authority pursuant to rules 12 adopted by the authority. 13 a. b. Upon review of the application, the authority 14 may register the housing project under the program. If the 15 authority registers the housing project, the authority shall 16 make a preliminary determination as to the amount of tax 17 incentives for which the housing project qualifies and scoring 18 of all applications received during an application period, the 19 authority may make a tax incentive award to a housing project, 20 which tax incentive award shall represent the maximum amount of 21 tax incentives the housing project may qualify for under the 22 program . In determining a tax incentive award, the authority 23 shall not use an amount of project costs that exceeds the 24 amount included in the application of the housing business. 25 Tax incentive awards shall be approved by the director of the 26 authority. 27 b. c. After registering the housing project making a 28 tax incentive award , the authority shall notify the housing 29 business of successful registration under the program its tax 30 incentive award . The notification shall include the amount 31 of tax incentives under section 15.355 for which the housing 32 business has received preliminary approval an award and a 33 statement that the amount is a preliminary determination only 34 housing business has no right to receive a tax incentive 35 -7- LSB 1824HV (2) 88 ko/jh 7/ 21

H.F. 772 certificate or claim a tax incentive until all requirements 1 of the program, including all requirements imposed by the 2 agreement entered into pursuant to subsection 3, are satisfied . 3 The amount of tax credits included on a tax credit certificate 4 issued pursuant to this section , or a claim for refund of sales 5 and use taxes, shall be contingent upon completion of the all 6 requirements in subsection 3 . 7 d. An applicant that does not receive a tax incentive award 8 during an application period may make additional applications 9 during subsequent application periods. Such applicant shall be 10 required to submit a new application and shall be competitively 11 reviewed and scored in the same manner as other applicants in 12 that application period. 13 Sec. 18. Section 15.354, subsection 3, paragraphs a and e, 14 Code 2019, are amended to read as follows: 15 a. Upon successful registration of receipt of a tax 16 incentive award by the housing project, the housing business 17 shall enter into an agreement with the authority for the 18 successful completion of all requirements of the program. The 19 agreement shall identify the tax incentive award amount, the 20 tax incentive award date, the project completion deadline, and 21 the total costs of the housing project. 22 e. (1) Upon review of the examination and verification 23 of the amount of the qualifying new investment, the authority 24 may notify the housing business of the amount that the housing 25 business may claim as a refund of the sales and use tax under 26 section 15.355, subsection 2, and may issue a tax credit 27 certificate to the housing business stating the amount of 28 workforce housing investment tax credits under section 15.355 , 29 subsection 3, the eligible housing business may claim. The 30 sum of the amount that the housing business may claim as a 31 refund of the sales and use tax and the amount of the tax credit 32 certificate shall not exceed the amount of the tax incentive 33 award. 34 (2) If upon review of the examination in subparagraph 35 -8- LSB 1824HV (2) 88 ko/jh 8/ 21

H.F. 772 (1) the authority determines that a housing project has 1 incurred project costs in excess of the amount submitted in the 2 application made pursuant to subsection 1 and identified in the 3 agreement , the authority shall do one of the following: 4 (a) If the project costs do not cause the housing project’s 5 average dwelling unit cost to exceed the applicable maximum 6 amount authorized in section 15.353, subsection 3 , the 7 authority may consider the agreement fulfilled and may issue a 8 tax credit certificate. 9 (b) If the project costs cause the housing project’s 10 average dwelling unit cost to exceed the applicable maximum 11 amount authorized in section 15.353, subsection 3 , but does not 12 cause the average dwelling unit cost to exceed one hundred ten 13 percent of such applicable maximum amount, the authority may 14 consider the agreement fulfilled and may issue a tax credit 15 certificate. In such case, the authority shall reduce the tax 16 incentive award and the corresponding amount of tax incentives 17 the eligible housing project may claim under section 15.355, 18 subsections 2 and 3 , by the same percentage that the housing 19 project’s average dwelling unit cost exceeds the applicable 20 maximum amount under section 15.353, subsection 3 , and such 21 tax incentive reduction shall be reflected on the tax credit 22 certificate. If the authority issues a certificate pursuant 23 to this subparagraph division, the department of revenue 24 shall accept the certificate notwithstanding that the housing 25 project’s average dwelling unit costs exceeds the maximum 26 amount specified in section 15.353, subsection 3 . 27 (c) If the project costs cause the housing project’s 28 average dwelling unit cost to exceed one hundred ten percent 29 of the applicable maximum amount authorized in section 15.353, 30 subsection 3 , the authority shall determine the eligible 31 housing business to be in default under the agreement , shall 32 revoke the tax incentive award, and shall not issue a tax 33 credit certificate. The housing business shall not be allowed 34 a refund of sales and use tax under section 15.355, subsection 35 -9- LSB 1824HV (2) 88 ko/jh 9/ 21

H.F. 772 2. 1 Sec. 19. Section 15.354, subsection 4, Code 2019, is amended 2 by striking the subsection and inserting in lieu thereof the 3 following: 4 4. Maximum tax incentives amount. 5 a. (1) For fiscal years beginning on or after July 1, 2019, 6 the authority shall not award in any fiscal year an amount of 7 tax incentives for housing projects located in small cities, or 8 for other housing projects, in excess of the amounts allocated 9 for each category in section 15.119, subsection 2, paragraph 10 “g” . This paragraph “a” applies to housing projects awarded tax 11 incentives pursuant to subsection 2 on or after July 1, 2019, 12 and to housing projects registered prior to July 1, 2019, under 13 section 15.354, subsection 2, Code 2019. 14 (2) Notwithstanding subparagraph (1), and section 15.119, 15 subsection 2, paragraph “g” , if the sum of the amount of tax 16 incentives applied for in valid applications submitted in a 17 given fiscal year beginning on or after July 1, 2019, for 18 housing projects located in small cities, plus the amount 19 of tax incentives eligible for issuance to housing projects 20 located in small cities that were registered prior to July 21 1, 2019, under section 15.354, subsection 2, Code 2019, does 22 not exceed the amount reserved for housing projects located 23 in small cities pursuant to section 15.119, subsection 2, 24 paragraph “g” , the authority may award the remaining amount of 25 tax incentives reserved for housing projects located in small 26 cities to other housing projects during that same fiscal year. 27 (3) Notwithstanding subparagraph (1), and section 15.119, 28 subsection 2, paragraph “g” , the authority may award during a 29 fiscal year an aggregate amount of tax incentives to housing 30 projects located in small cities that is less than the amount 31 reserved for allocation to small cities under section 15.119, 32 subsection 2, paragraph “g” , provided the difference between 33 the amount of the small city reservation and the aggregate 34 amount actually awarded to small cities during that fiscal year 35 -10- LSB 1824HV (2) 88 ko/jh 10/ 21

H.F. 772 is awarded during that same fiscal year to housing projects 1 registered prior to July 1, 2018. 2 b. With regard to a housing project registered prior to 3 July 1, 2019, a tax incentive shall be considered awarded for 4 purposes of paragraph “a” when the authority enters into an 5 agreement with the housing business for that housing project 6 as provided under section 15.354, subsection 3, Code 2019. 7 Notwithstanding any provision of law to the contrary, a housing 8 business shall have no right to enter into an agreement with 9 the authority for a housing project registered prior to July 1, 10 2019, until the authority allocates an amount of tax incentives 11 to the housing project and notifies the housing business 12 that the authority is prepared to execute the agreement 13 and make a tax incentive award for the housing project. A 14 housing business shall have no right to receive a tax credit 15 certificate or claim a tax incentive for a housing project 16 registered prior to July 1, 2019, until the housing business 17 enters into an agreement with the authority. 18 c. In making tax incentive awards during any fiscal year 19 in which there are housing projects registered prior to July 20 1, 2019, which are eligible to receive tax incentives under 21 the program, the authority shall give priority in making tax 22 incentive awards to housing projects registered prior to July 23 1, 2019. The authority shall create and maintain a wait list 24 of housing projects registered prior to July 1, 2019, and such 25 housing projects shall be placed on the wait list in the order 26 the housing projects were registered. 27 d. The maximum aggregate amount of tax incentives that 28 may be awarded and issued under section 15.355 to a housing 29 business for a housing project shall not exceed one million 30 dollars. 31 e. If a housing business qualifies for a higher amount 32 of tax incentives under section 15.355 than is allowed by 33 the limitation imposed in paragraph “d” , the authority and 34 the housing business may negotiate an apportionment of the 35 -11- LSB 1824HV (2) 88 ko/jh 11/ 21

H.F. 772 reduction in tax incentives between the sales tax refund 1 provided in section 15.355, subsection 2, and the workforce 2 housing investment tax credits provided in section 15.355, 3 subsection 3, provided the total aggregate amount of tax 4 incentives after the apportioned reduction does not exceed the 5 amount in paragraph “d” . 6 f. The authority shall issue tax incentives under the 7 program on a first-come, first-served basis until the maximum 8 amount of tax incentives allocated under section 15.119, 9 subsection 2, paragraph “g” , is reached. The authority shall 10 maintain a list of housing projects registered prior to July 11 1, 2019, and of housing projects awarded tax incentives on or 12 after July 1, 2019, so that if the maximum aggregate amount 13 of tax incentives is reached in a given fiscal year, such 14 registered housing projects that were completed but for which 15 tax incentives were not issued, and such housing projects that 16 were completed and are awarded tax incentives but for which tax 17 incentives have not been issued, shall be placed on a wait list 18 in the order the housing projects were registered or awarded 19 tax incentives and shall be given priority for receiving tax 20 incentives in succeeding fiscal years. 21 Sec. 20. Section 15.354, subsection 5, Code 2019, is amended 22 to read as follows: 23 5. Termination and repayment. The failure by a housing 24 business in completing a housing project to comply with any 25 requirement of this program or any of the terms and obligations 26 of an agreement entered into pursuant to this section may 27 result in the revocation, reduction, termination, or rescission 28 of the tax incentive award or the approved tax incentives and 29 may subject the housing business to the repayment or recapture 30 of tax incentives claimed under section 15.355 . The repayment 31 or recapture of tax incentives pursuant to this section shall 32 be accomplished in the same manner as provided in section 33 15.330, subsection 2 . 34 Sec. 21. Section 15.355, subsection 2, Code 2019, is amended 35 -12- LSB 1824HV (2) 88 ko/jh 12/ 21

H.F. 772 to read as follows: 1 2. A housing business may claim a refund of the sales and 2 use taxes paid under chapter 423 that are directly related to 3 a housing project and specified in the agreement . The refund 4 available pursuant to this subsection shall be as provided in 5 section 15.331A , excluding subsection 2 , paragraph “c” , of 6 that section. For purposes of the program, the term “project 7 completion” , as used in section 15.331A , shall mean the date on 8 which the authority notifies the department of revenue that all 9 applicable requirements of an agreement entered into pursuant 10 to section 15.354 are satisfied. 11 Sec. 22. Section 15.355, subsection 3, paragraph a, 12 subparagraphs (1) and (2), Code 2019, are amended to read as 13 follows: 14 (1) For a housing project not located in a small city, ten 15 percent of the qualifying new investment of a housing project 16 specified in the agreement . 17 (2) For a housing project located in a small city, twenty 18 percent of the qualifying new investment of a housing project 19 specified in the agreement . 20 Sec. 23. WORKFORCE HOUSING TAX INCENTIVES PROGRAM —— FISCAL 21 YEAR 2019-2020. Notwithstanding section 15.119, subsection 2, 22 paragraph “g”, for the fiscal year beginning July 1, 2019, and 23 ending June 30, 2020, all moneys allocated pursuant to section 24 15.119, subsection 2, paragraph “g”, shall be allocated by the 25 economic development authority to qualified housing projects 26 in small cities, as defined in section 15.352, that were 27 registered prior to July 1, 2019. If the sum of the amount of 28 tax incentives allocated in the fiscal year beginning July 1, 29 2019, and ending June 30, 2020, for housing projects located in 30 small cities that were registered prior to July 1, 2019, does 31 not exceed the moneys that may be allocated pursuant to section 32 15.119, subsection 2, paragraph “g”, the authority may allocate 33 the remaining moneys to other qualified housing projects that 34 were registered prior to July 1, 2019. 35 -13- LSB 1824HV (2) 88 ko/jh 13/ 21

H.F. 772 Sec. 24. APPLICABILITY. 1 1. Except as provided in subsection 2, this division of 2 this Act applies to housing projects awarded tax incentives by 3 the authority under the program on or after July 1, 2019, and 4 housing projects registered by the authority under the program 5 prior to July 1, 2019, shall be governed by sections 15.352, 6 15.354, and 15.355, Code 2019. 7 2. The provision of this division of this Act amending 8 section 15.354, subsection 4, applies to housing projects 9 registered by the authority under the program prior to July 1, 10 2019, and to housing projects awarded tax incentives by the 11 authority under the program on or after July 1, 2019. 12 EXPLANATION 13 The inclusion of this explanation does not constitute agreement with 14 the explanation’s substance by the members of the general assembly. 15 This bill relates to incentives for broadband and workforce 16 housing. 17 DIVISION I —— TITLE OF ACT. The bill provides that it may be 18 known and cited as the “Empower Rural Iowa Act”. 19 DIVISION II —— BROADBAND. Division II of the bill 20 modifies provisions applicable to the broadband grant program 21 administered by the office of the chief information officer 22 (OCIO) under Code chapter 8B, and the property tax exemption 23 for broadband infrastructure provided in Code section 24 427.1(40). 25 Current law requires the OCIO to administer a broadband 26 grant program to award grants to communications service 27 providers that reduce or eliminate targeted service areas, 28 as defined, by installing broadband infrastructure that 29 facilitates broadband service at or above 25 megabits per 30 second of download speed and 3 megabits per second of upload 31 speed as of July 1, 2015. The bill provides that the broadband 32 grant program shall be designed to reduce or eliminate unserved 33 and underserved areas in Iowa and leverage federal funds and 34 public and private partnerships where possible. The bill 35 -14- LSB 1824HV (2) 88 ko/jh 14/ 21

H.F. 772 removes references to the specified download and upload speeds 1 and date throughout Code chapter 8B and instead references 2 the download and upload speeds identified by the federal 3 communications commission (FCC) pursuant to federal law. The 4 bill also provides a new definition for “facilitate” in Code 5 section 8B.1, as described in the bill. 6 Current law provides that the determination of whether a 7 communications service provider facilitates broadband service 8 meeting the requisite download or upload speeds shall be 9 ascertained by reference to certain broadband availability 10 maps or data sources identified by the OCIO by rule. The bill 11 requires the OCIO to periodically make renewed determinations 12 of whether such a provider facilitates broadband service 13 at or above the requisite speeds, including making such 14 determinations prior to each round of grant applications. 15 Current law allows unencumbered or unobligated moneys 16 remaining in the broadband grant fund at the close of the 17 fiscal year to remain available for use until the close of the 18 succeeding fiscal year. The bill instead provides that such 19 moneys shall remain available until three years following the 20 last day of the fiscal year in which the funds were originally 21 appropriated. 22 The bill requires the OCIO open application review process 23 to include an opportunity for public comment on applications. 24 Current law provides certain factors for the OCIO to 25 consider in awarding grants on a competitive basis. The bill 26 modifies such factors for the OCIO to consider in awarding 27 grants and provides that the OCIO shall afford the greatest 28 weight to certain factors, as described in the bill. 29 Current law requires the OCIO to evaluate applications for 30 broadband grants only pursuant to the information provided 31 in an application. The bill allows the OCIO to consider any 32 information obtained during the application process or period 33 for public comment. 34 The bill extends the OCIO broadband grant program from July 35 -15- LSB 1824HV (2) 88 ko/jh 15/ 21

H.F. 772 1, 2020, to July 1, 2025. 1 Current law requires the OCIO to adopt rules related to the 2 broadband grant program. The bill instead provides the OCIO 3 with discretion to adopt rules deemed necessary to interpret 4 or administer Code chapter 8B, including but not limited to 5 rules relating to the broadband grant program. However, the 6 bill requires the OCIO to adopt rules establishing procedures 7 to allow aggrieved applicants an opportunity to challenge 8 broadband grant awards. 9 Current Code section 427.1(40) provides owners of broadband 10 infrastructure an exemption from property tax under Code 11 chapter 427, for installations of broadband infrastructure 12 that facilitate broadband service at or above the download and 13 upload speeds specified in Code chapter 8B in targeted service 14 areas commenced and completed on or after July 1, 2015, and 15 before July 1, 2020, for assessment years beginning before 16 January 1, 2022. 17 The bill provides that the words and phrases used in Code 18 section 427.1(40) shall have the same meaning as used in 19 Code chapter 8B, including but not limited to the words and 20 phrases defined in Code section 8B.1. The bill extends the 21 property tax exemption for broadband infrastructure to apply 22 to installations commenced and completed on or after July 1, 23 2015, and before July 1, 2025, for assessment years beginning 24 before January 1, 2027. The bill removes references to the 25 specified download and upload speeds throughout Code section 26 427.1(40) and instead includes by reference the download and 27 upload speeds identified by the FCC. The bill requires a 28 person claiming an exemption to certify that the broadband 29 installation will facilitate broadband service within a 30 targeted service area at or above the download and upload 31 speeds identified by the FCC. The bill extends the future 32 repeal date of Code section 427.1(40) from July 1, 2024, to 33 July 1, 2030. 34 DIVISION III —— WORKFORCE HOUSING TAX INCENTIVE PROGRAM. 35 -16- LSB 1824HV (2) 88 ko/jh 16/ 21

H.F. 772 Division III of the bill modifies the workforce housing tax 1 incentives program. 2 BACKGROUND. Current law provides that the workforce housing 3 tax incentive program (program) administered by the economic 4 development authority (authority) makes tax incentives in the 5 form of investment tax credits and sales and use tax refunds 6 available to housing businesses that complete certain housing 7 projects in Iowa. In order to receive tax incentives, a 8 housing business must apply to the authority and have its 9 housing project registered by the authority, and then must 10 enter into an agreement with the authority (tax incentive 11 agreement) for the successful completion of all requirements 12 of the program. Current law requires a housing business to 13 complete its housing project within three years from the date 14 the housing project is registered by the authority. Upon 15 application by the housing business prior to expiration of the 16 three years, and at the authority’s discretion, a one-time, 17 12-month extension may be granted. If the housing project 18 is completed and properly examined by a certified public 19 accountant, and all other requirements of the tax incentive 20 agreement and the program are satisfied, the authority may 21 issue a tax credit certificate and the housing business may 22 claim the tax incentives for which it qualifies under the 23 program. Currently, the total tax incentives issued under the 24 program per fiscal year cannot exceed $20 million. Of that 25 $20 million annual cap, $5 million must be reserved for tax 26 incentives issued to housing projects located in small cities, 27 as defined under the program. The program also limits the 28 maximum amount of tax incentives that may be issued per housing 29 project to $1 million. Current law requires the authority 30 to issue tax incentives under the program on a first-come, 31 first-served basis, and in the event the total tax incentives 32 for all registered housing projects completed in a fiscal year 33 exceeds an annual cap, the authority is required to maintain a 34 wait list of completed housing projects, and give those housing 35 -17- LSB 1824HV (2) 88 ko/jh 17/ 21

H.F. 772 projects priority for being issued tax incentives in subsequent 1 fiscal years. 2 BILL CHANGES. The bill amends current law relating to the 3 acceptance of housing project applications by the authority. 4 Current law states that the authority may accept applications 5 on a continuous basis. The bill requires the authority to 6 accept applications during one or more application periods, and 7 provides that housing project applications shall be reviewed 8 and scored on a competitive basis by the authority pursuant to 9 rules adopted by the authority. 10 The bill removes registration of housing projects from the 11 program, and provides that the authority may make tax incentive 12 awards to housing projects. Tax incentive awards shall be 13 subject to the approval of the director of the authority. 14 Applicants who do not receive a tax incentive award are 15 authorized under the bill to make additional applications for 16 that housing project during subsequent application periods. In 17 determining the tax incentive award of a particular housing 18 project, the bill prohibits the authority from using an amount 19 of housing project costs that exceeds the amount included in 20 the housing project application. 21 The bill requires the authority to notify the housing 22 business of its tax incentive award. The notification must 23 include a statement that the housing business has no right to 24 receive a tax incentive certificate or claim a tax incentive 25 until all requirements of the program and the tax incentive 26 agreement are satisfied. 27 The bill amends the requirements related to the tax 28 incentive agreement entered into by the authority and a housing 29 business to provide that such agreement shall identify the 30 tax incentive award amount, the tax incentive award date, the 31 project completion deadline, and the total costs of the housing 32 project. 33 The bill provides that after review of the examination of 34 the housing project and verification of the qualifying new 35 -18- LSB 1824HV (2) 88 ko/jh 18/ 21