Senate File 2406 - Introduced SENATE FILE 2406 BY COMMITTEE ON APPROPRIATIONS (SUCCESSOR TO SF 2314) (SUCCESSOR TO SSB 3092) A BILL FOR An Act relating to the establishment of a disaster recovery 1 homeowner assistance program and fund administered by the 2 Iowa finance authority, transfers of moneys to certain 3 funds, and including effective date provisions. 4 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 5 TLSB 5422SZ (2) 88 ko/jh

S.F. 2406 Section 1. NEW SECTION . 16.43 Use of revolving loan funds. 1 Notwithstanding any other provision of law to the contrary, 2 the authority may transfer any unobligated and unencumbered 3 moneys in any revolving loan program fund created pursuant to 4 section 16.46, 16.47, 16.48, or 16.49, for deposit in any other 5 fund created under this part. 6 Sec. 2. NEW SECTION . 16.44 Disaster recovery homeowner 7 assistance program and fund. 8 1. As used in this section, unless the context otherwise 9 requires: 10 a. “Disaster-affected home” means any of the following: 11 (1) A primary residence that is destroyed or damaged due to 12 a natural disaster that occurs on or after the effective date 13 of this Act, and is located in a county that due to the natural 14 disaster is the subject of a state of disaster emergency 15 proclamation by the governor that authorizes disaster recovery 16 homeowner assistance. 17 (2) A primary residence that is destroyed or damaged due to 18 a natural disaster that occurred on or after March 12, 2019, 19 but before the effective date of this Act, and is located in a 20 county that has been declared a major disaster by the president 21 of the United States on or after March 12, 2019, but before the 22 effective date of this Act, and that is also a county in which 23 individuals are eligible for federal individual assistance. 24 b. “Fund” means the disaster recovery homeowner assistance 25 fund. 26 c. “Local program administrator” means any of the following: 27 (1) The cities of Ames, Cedar Falls, Cedar Rapids, Council 28 Bluffs, Davenport, Des Moines, Dubuque, Iowa City, Waterloo, 29 and West Des Moines. 30 (2) A council of governments whose territory includes at 31 least one county that is the subject of a state of disaster 32 emergency proclamation by the governor that authorizes disaster 33 recovery homeowner assistance on or after the effective date 34 of this Act. 35 -1- LSB 5422SZ (2) 88 ko/jh 1/ 8

S.F. 2406 (3) A qualified local organization or governmental entity 1 as determined by rules as adopted by the authority. 2 d. “Program” means the disaster recovery homeowner 3 assistance program. 4 e. “Replacement housing” means housing purchased by a 5 homeowner to replace a disaster-affected home that is destroyed 6 or damaged beyond reasonable repair as determined by a local 7 program administrator. 8 f. “State of disaster emergency” means the same as described 9 in section 29C.6, subsection 1. 10 2. a. A disaster recovery homeowner assistance fund 11 is created within the authority, and the authority shall 12 administer the fund in a manner to award forgivable loans to 13 eligible homeowners for purposes of this section. 14 b. The fund may consist of any moneys appropriated by the 15 general assembly for purposes of this section and any other 16 moneys that are lawfully available to the authority. The 17 authority shall use any moneys specifically appropriated for 18 purposes of this section only for the purposes of this section. 19 The authority may use all other moneys in the fund, including 20 interest, earnings, and recaptures, for purposes of this 21 section. 22 c. Notwithstanding section 8.39, subsections 1 and 3, 23 and notwithstanding any other law to the contrary, with 24 the prior written consent and approval of the governor, the 25 executive director of the Iowa finance authority may transfer 26 any unobligated and unencumbered moneys in any fund created 27 pursuant to section 16.5, subsection 1, paragraph “s” , for 28 deposit in the disaster recovery homeowner assistance fund. 29 The prior written consent and approval of the director of the 30 department of management shall not be required to transfer the 31 unobligated and unencumbered moneys. 32 d. Notwithstanding section 8.39, subsections 2 and 3, and 33 notwithstanding any other law to the contrary, with the prior 34 written approval of the director of the economic development 35 -2- LSB 5422SZ (2) 88 ko/jh 2/ 8

S.F. 2406 authority and the prior written approval of the governor, the 1 executive director of the Iowa finance authority may transfer 2 any unobligated and unencumbered moneys in any fund created 3 pursuant to section 15.106A, subsection 1, paragraph “o” , for 4 deposit in the disaster recovery homeowner assistance fund. 5 e. Notwithstanding section 8.33, moneys in the fund at the 6 end of each fiscal year shall not revert to the general fund or 7 any other fund but shall remain in the fund for expenditure for 8 subsequent fiscal years. 9 f. The authority shall not use more than five percent of 10 the moneys in the fund at the beginning of a fiscal year for 11 purposes of administrative costs and other program support. 12 3. The authority shall establish and administer a disaster 13 recovery homeowner assistance program and shall use moneys in 14 the fund to award forgivable loans to eligible homeowners of 15 disaster-affected homes. Moneys in the fund may be expended 16 following a state of disaster emergency proclamation by 17 the governor that authorizes disaster recovery homeowner 18 assistance. The authority may enter into an agreement with one 19 or more local program administrators to administer the program. 20 4. To be considered for a forgivable loan under the program, 21 a homeowner must register for the disaster case management 22 program established pursuant to section 29C.20B. The disaster 23 case manager may refer the homeowner to the appropriate local 24 program administrator. 25 5. To be eligible for a forgivable loan under the program a 26 homeowner must meet all of the following requirements: 27 a. The homeowner’s disaster-affected home must have 28 sustained damage greater than the damage that is covered by the 29 homeowner’s property and casualty insurance policy insuring the 30 home plus any other state or federal disaster-related financial 31 assistance that the homeowner is eligible to receive. 32 b. A local program administrator must deem the homeowner’s 33 disaster-affected home suitable for rehabilitation or damaged 34 beyond reasonable repair. 35 -3- LSB 5422SZ (2) 88 ko/jh 3/ 8

S.F. 2406 c. If the homeowner is seeking a forgivable loan for the 1 repair or rehabilitation of the homeowner’s disaster-affected 2 home, the homeowner’s disaster-affected home cannot be proposed 3 for buyout by the county or city in which the disaster-affected 4 home is located. 5 6. a. If a homeowner is referred to the authority or to a 6 local program administrator by the homeowner’s disaster case 7 manager, the authority may award a forgivable loan to the 8 eligible homeowner for any of the following purposes: 9 (1) Repair or rehabilitation of the homeowner’s 10 disaster-affected home. 11 (2) Down payment assistance on the purchase of replacement 12 housing and the cost of reasonable repairs to be performed 13 on the replacement housing to render the replacement housing 14 decent, safe, sanitary, and in good repair. Replacement 15 housing purchased by a homeowner shall not be located 16 in a one-hundred-year floodplain. For purposes of this 17 subparagraph, “decent, safe, sanitary, and in good repair” 18 means the same as described in 24 C.F.R. §5.703. 19 b. The maximum forgivable loan that the authority may 20 award to any one eligible homeowner shall be determined by the 21 authority by rule. 22 c. All forgivable loans that are awarded to an eligible 23 homeowner shall have a five-year term and shall be 24 interest-free. 25 d. A forgivable loan awarded to an eligible homeowner shall 26 be forgiven by the authority by a uniform percentage on a 27 monthly basis as determined by rules adopted by the authority. 28 e. If a homeowner who has been awarded a forgivable loan 29 sells a disaster-affected home or replacement housing for which 30 the homeowner received the forgivable loan prior to the end 31 of the five-year loan term, the remaining principal on the 32 forgivable loan shall be due and payable pursuant to rules 33 adopted by the authority. 34 7. The authority shall adopt rules pursuant to chapter 17A 35 -4- LSB 5422SZ (2) 88 ko/jh 4/ 8

S.F. 2406 to implement and administer this section. 1 Sec. 3. EFFECTIVE DATE. This Act, being deemed of immediate 2 importance, takes effect upon enactment. 3 EXPLANATION 4 The inclusion of this explanation does not constitute agreement with 5 the explanation’s substance by the members of the general assembly. 6 This bill relates to the establishment of a disaster 7 recovery homeowner assistance program and fund administered by 8 the Iowa finance authority, and transfers of moneys to certain 9 funds. 10 The bill creates a disaster recovery homeowner assistance 11 fund (fund) within the Iowa finance authority (authority). The 12 fund may consist of any moneys appropriated by the general 13 assembly and any other moneys that are lawfully available to 14 the authority. The authority may use all moneys in the fund, 15 including interest, earnings, and recaptures for the purposes 16 of the fund. Moneys in the fund at the end of each fiscal year 17 do not revert to any other fund but remain in the fund for 18 expenditure for subsequent fiscal years. The bill prohibits 19 the authority from using more than 5 percent of the moneys in 20 the fund at the beginning of a fiscal year for purposes of 21 administrative costs and other program support. 22 Notwithstanding any other law to the contrary, the bill 23 permits the authority to transfer any unobligated and 24 unencumbered moneys in the revolving loan program funds 25 created pursuant to Code sections 16.46, 16.47, 16.48, or 26 16.49, for deposit in any other fund created under Code 27 chapter 16, part 4. Notwithstanding Code sections 8.39(1) 28 and 8.39(3), and notwithstanding any other law to the 29 contrary, the bill permits the executive director of the 30 authority to transfer any unobligated and unencumbered moneys 31 in any fund created pursuant to Code section 16.5(1)(s), 32 for deposit in the disaster recovery homeowner assistance 33 fund with the prior written consent and approval of the 34 governor. The prior consent and approval of the director of 35 -5- LSB 5422SZ (2) 88 ko/jh 5/ 8

S.F. 2406 the department of management is not required to transfer the 1 funds. Notwithstanding Code sections 8.39(2) and 8.39(3), 2 and notwithstanding any other law to the contrary, the bill 3 permits the executive director of the Iowa finance authority to 4 transfer any unobligated and unencumbered moneys in any fund 5 created pursuant to Code section 15.106A(1)(o), for deposit in 6 the disaster recovery homeowner assistance fund, with the prior 7 written approval of the director of the economic development 8 authority and the prior written approval of the governor. 9 The bill directs the authority to establish and administer a 10 disaster recovery homeowner assistance program (program) and to 11 use moneys in the fund to provide forgivable loans to eligible 12 homeowners of disaster-affected homes. “Disaster-affected 13 home” is defined in the bill as a primary residence that is 14 destroyed or damaged due to a natural disaster that occurs on 15 or after the effective date of the bill, and that is located 16 in a county that due to the natural disaster is the subject 17 of a state of disaster emergency proclamation by the governor 18 that authorizes disaster recovery homeowners assistance; or a 19 primary residence that is destroyed or damaged due to a natural 20 disaster that occurred on or after March 12, 2019, but before 21 the effective date of the bill, and is located in a county that 22 has been declared a major disaster by the president of the 23 United States on or after March 12, 2019, and that is also a 24 county in which individuals are eligible for federal individual 25 assistance. 26 The authority may enter into an agreement with one or more 27 local program administrators (administrator) to administer the 28 program, and moneys in the fund may be expended following a 29 state of disaster emergency proclamation by the governor that 30 authorizes disaster recovery homeowner assistance. “Local 31 program administrator” is defined in the bill as the cities of 32 Ames, Cedar Falls, Cedar Rapids, Council Bluffs, Davenport, Des 33 Moines, Dubuque, Iowa City, Waterloo, and West Des Moines; and 34 a council of governments whose territory includes at least one 35 -6- LSB 5422SZ (2) 88 ko/jh 6/ 8

S.F. 2406 county that is the subject of the state of disaster emergency 1 proclamation by the governor that authorizes disaster recovery 2 homeowner assistance; or a qualified local organization or 3 governmental entity as determined by rules as adopted by the 4 authority. 5 To be considered for a forgivable loan under the program, 6 a homeowner must register for the disaster case management 7 program established pursuant to Code section 29C.20B. 8 The disaster case manager may refer the homeowner to the 9 appropriate administrator. 10 To be eligible for a forgivable loan under the program, 11 the bill requires a homeowner to own a disaster-affected home 12 (home) located in a county that has been proclaimed a state 13 of disaster emergency by the governor; the home must have 14 sustained damage greater than the damage that is covered by the 15 homeowner’s property and casualty insurance policy insuring 16 the home plus any other state or federal disaster-related 17 financial assistance that the homeowner is eligible to receive; 18 an administrator must deem the home suitable for rehabilitation 19 or damaged beyond reasonable repair; and if the homeowner is 20 seeking a forgivable loan for the repair or rehabilitation of 21 the homeowner’s disaster-affected home, the home cannot be 22 proposed for buyout by the county or city in which the home is 23 located. 24 If a homeowner is referred to an administrator by the 25 homeowner’s manager, the bill allows the authority to award 26 a forgivable loan to the eligible homeowner for repair or 27 rehabilitation of the disaster-affected home, or for down 28 payment assistance on the purchase of replacement housing, 29 and the cost of reasonable repairs to be performed on the 30 replacement housing to render it decent, safe, sanitary, and 31 in good repair. Replacement housing purchased by a homeowner 32 cannot be located in a 100-year floodplain. All awarded 33 forgivable loans must be interest-free and have a five-year 34 term. The maximum forgivable loan that may be awarded to any 35 -7- LSB 5422SZ (2) 88 ko/jh 7/ 8

S.F. 2406 one eligible homeowner shall be determined by the authority 1 by rule. “Decent, safe, sanitary, and in good repair” is 2 defined in the bill to mean the same as described in 24 C.F.R. 3 §5.703. “Replacement housing” is defined in the bill as 4 housing purchased by a homeowner to replace a disaster-affected 5 home that is destroyed or damaged beyond reasonable repair as 6 determined by a local program administrator. 7 A uniform percentage of a forgivable loan awarded to a 8 homeowner must be forgiven by the authority on a monthly 9 basis as determined by rules adopted by the authority. If 10 a homeowner who has been awarded a forgivable loan sells a 11 disaster-affected home or replacement housing for which the 12 homeowner received the forgivable loan prior to the end of 13 the five-year term, the remaining principal on the forgivable 14 loan becomes due and payable pursuant to rules adopted by the 15 authority. 16 The authority is required to adopt rules to implement and 17 administer the fund and the program. 18 The bill takes effect upon enactment. 19 -8- LSB 5422SZ (2) 88 ko/jh 8/ 8