H.F. _____ Section 1. Section 260E.4, Code 2021, is amended to read as 1 follows: 2 260E.4 Incremental property taxes. 3 If an agreement provides that all or part of program costs 4 are to be paid for by incremental property taxes, the board 5 of directors shall provide by resolution that taxes levied 6 on the employer’s taxable business property, where new jobs 7 are created as a result of a project, each year by or for 8 the benefit of the state, city, county, school district, 9 or other taxing district after the effective date of the 10 resolution shall be divided as provided in section 403.19, 11 subsections 1 and 2 , in the same manner as if the employer’s 12 business property, where new jobs are created as a result of a 13 project, was taxable property in an urban renewal project and 14 the resolution was an ordinance within the meaning of those 15 subsections. The taxes received by the board of directors 16 shall be allocated to and when collected be paid into a special 17 fund of the community college and may be irrevocably pledged 18 by the community college to pay the principal of and interest 19 on the certificates issued by the community college to finance 20 or refinance, in whole or in part, the project. However, 21 with respect to any urban renewal project as to which an 22 ordinance is in effect under section 403.19 , the collection 23 of incremental property taxes authorized by this chapter are 24 suspended in favor of collection of incremental taxes under 25 section 403.19 . As used in this section , “taxes” includes, but 26 is not limited to, all levies on an ad valorem basis upon land 27 or real property of the employer’s business, where new jobs 28 are created as a result of a project. The urban renewal area 29 duration limitations under section 403.18A and the limitations 30 on the duration of ordinances under section 403.19, subsection 31 3A, shall not apply to resolutions adopted under this section. 32 Sec. 2. Section 357H.9, subsection 1, Code 2021, is amended 33 by adding the following new paragraph: 34 NEW PARAGRAPH . 0f. The urban renewal area duration 35 -1- LSB 2264YC (3) 89 md/jh 1/ 6

H.F. _____ limitations under section 403.18A and the limitations on the 1 duration of ordinances under section 403.19, subsection 3A, 2 shall not apply to rural improvement zones established under 3 this chapter and resolutions adopted under this section. 4 Sec. 3. NEW SECTION . 403.18A Urban renewal area and 5 division of revenue limitations. 6 1. An urban renewal area in existence on the effective date 7 of this Act for which an ordinance providing for a division of 8 revenue under section 403.19 was adopted before the effective 9 date of this Act and that is not limited in duration under 10 either section 403.17, subsection 10, or section 403.22, 11 subsection 5, shall be subject to the assessed value adjustment 12 in subsection 2. 13 2. a. For each such urban renewal area described in 14 subsection 1, the urban renewal area, including all applicable 15 urban renewal plans, projects, and ordinances providing for 16 a division of revenue, shall continue in effect under this 17 chapter, until such time that the urban renewal area is 18 dissolved by the municipality or until the urban renewal area 19 terminates under the conditions of this section, whichever 20 occurs first. The municipality may continue to incur or issue 21 additional costs or indebtedness for such urban renewal area, 22 including loans, advances, and bonds, that qualify for payment 23 from the special fund created in section 403.19 on or after the 24 effective date of this Act and until dissolution or termination 25 of the urban renewal area. 26 b. Notwithstanding any provision of this chapter to the 27 contrary, for fiscal years beginning on or after July 1, 2022, 28 when calculating a division of revenue for an urban renewal 29 area described in subsection 1 for which the difference between 30 the year of the assessment roll referred to in section 403.19, 31 subsection 1, and the year of the assessment roll used to 32 calculate the total amount of property taxes in the urban 33 renewal area for the fiscal year in which the taxes are due 34 and payable, exceeds twenty years, the assessed value of the 35 -2- LSB 2264YC (3) 89 md/jh 2/ 6

H.F. _____ taxable property in the urban renewal area used to calculate 1 the amount of taxes under section 403.19, subsection 1, shall 2 be increased by an amount equal to ten percent of the assessed 3 value of the taxable property used to calculate the total 4 amount of property taxes in the urban renewal area for the 5 fiscal year in which taxes are due and payable. Following 6 the initial adjustment under this paragraph, the assessed 7 value of the taxable property used to calculate the amount of 8 taxes under section 403.19, subsection 1, shall be further 9 increased for each subsequent fiscal year by an amount equal to 10 ten percent of the assessed value of the taxable property in 11 the urban renewal area used to calculate the total amount of 12 property taxes in the urban renewal area for the fiscal year in 13 which taxes are due and payable. The adjustments under this 14 paragraph shall continue until such time as operation of this 15 paragraph “b” would cause the assessed value of the taxable 16 property used to calculate the amount of taxes under section 17 403.19, subsection 1, to exceed the assessed value of the 18 taxable property in the urban renewal area used to calculate 19 the total amount of property taxes in the urban renewal area 20 for the fiscal year in which the taxes are due and payable, 21 or the tenth fiscal year following the fiscal year for which 22 the first adjustment is made under this paragraph, whichever 23 is earlier. At that time, the urban renewal area, including 24 all applicable urban renewal plans, projects, and ordinances 25 providing for a division of revenue, shall terminate and be of 26 no further force and effect. 27 3. The department of management shall adopt rules pursuant 28 to chapter 17A necessary to implement and administer this 29 section. 30 Sec. 4. Section 403.19, Code 2021, is amended by adding the 31 following new subsection: 32 NEW SUBSECTION . 3A. Except as provided in section 403.22, 33 an ordinance providing for a division of revenue under this 34 section that is adopted on or after the effective date of 35 -3- LSB 2264YC (3) 89 md/jh 3/ 6

H.F. _____ this Act, including an ordinance providing for a division 1 of revenue for an economic development area under section 2 403.17, subsection 10, shall be limited to twenty years from 3 the calendar year following the calendar year in which the 4 municipality first certifies to the county auditor the amount 5 of any loans, advances, indebtedness, or bonds that qualify for 6 payment from the division of revenue provided in this section. 7 The urban renewal area, including all applicable urban renewal 8 plans, projects, and ordinances, shall terminate and be of 9 no further force and effect following the twenty-year period 10 provided in this subsection. 11 Sec. 5. EFFECTIVE DATE. This Act, being deemed of immediate 12 importance, takes effect upon enactment. 13 EXPLANATION 14 The inclusion of this explanation does not constitute agreement with 15 the explanation’s substance by the members of the general assembly. 16 This bill relates to Iowa’s urban renewal law by providing 17 that each urban renewal area in existence on the effective date 18 of the bill for which an ordinance providing for a division 19 of revenue (tax increment financing) was adopted before the 20 effective date of the bill, and that is not limited in duration 21 under either Code section 403.17, subsection 10 (20 years), or 22 Code section 403.22, subsection 5 (10 years), is subject to 23 the assessed value adjustment provided for in the bill. Under 24 the bill, when calculating a division of revenue for such an 25 urban renewal area for a fiscal year beginning on or after 26 July 1, 2022, and for which the difference between the year 27 of the assessment roll referred to in Code section 403.19, 28 subsection 1 (establishing a base assessed value), and the year 29 of the assessment roll used to calculate the total amount of 30 property taxes under Code section 403.19 for the fiscal year 31 in which the taxes are due and payable, exceeds 20 years, the 32 assessed value of the taxable property in the urban renewal 33 area used to calculate the amount of taxes under Code section 34 403.19, subsection 1, shall be increased by an amount equal to 35 -4- LSB 2264YC (3) 89 md/jh 4/ 6

H.F. _____ 10 percent of the assessed value used to calculate the total 1 amount of property taxes in the urban renewal area for the 2 applicable fiscal year. Following the initial adjustment, the 3 assessed value of the taxable property used to calculate the 4 amount of taxes under Code section 403.19, subsection 1, shall 5 be further increased for each subsequent fiscal year by an 6 amount equal to 10 percent of the assessed value of the taxable 7 property in the urban renewal area used to calculate the total 8 amount of property taxes for the applicable fiscal year, until 9 by operation of the bill the assessed value of the taxable 10 property used to calculate the amount of taxes under Code 11 section 403.19, subsection 1, exceeds the assessed value of the 12 taxable property in the urban renewal area used to calculate 13 the total amount of property taxes in the urban renewal area 14 for the fiscal year in which the taxes are due and payable, or 15 the 10th fiscal year following the fiscal year for which the 16 first adjustment is made under the bill, whichever is earlier, 17 at which time the urban renewal area, including all applicable 18 urban renewal plans, projects, and ordinances providing for a 19 division of revenue, shall terminate and be of no further force 20 and effect. 21 The bill provides that except for certain divisions of 22 revenue authorized for certain housing and residential 23 development under Code section 403.22, an ordinance providing 24 for a division of revenue under Code section 403.19 that is 25 adopted on or after the effective date of the bill shall be 26 limited to 20 years from the calendar year following the 27 calendar year in which the municipality first certifies to the 28 county auditor the amount of any loans, advances, indebtedness, 29 or bonds which qualify for payment from the division of revenue 30 provided in Code section 403.19. Under the bill, the urban 31 renewal area, including all applicable urban renewal plans, 32 projects, and ordinances shall terminate and be of no further 33 force and effect following the 20-year period provided in the 34 bill. 35 -5- LSB 2264YC (3) 89 md/jh 5/ 6

H.F. _____ The bill specifies that the urban renewal duration limits 1 under new Code section 403.18A and the limitations on the 2 duration of ordinances providing for a division of revenue 3 under Code section 403.19, new subsection 3A, shall not apply 4 to divisions of taxes established by community colleges under 5 Code chapter 260E or rural improvement zones under Code chapter 6 357H. 7 The bill takes effect upon enactment. 8 -6- LSB 2264YC (3) 89 md/jh 6/ 6