House File 1037 - Introduced HOUSE FILE 1037 BY COMMITTEE ON WAYS AND MEANS (SUCCESSOR TO HF 617) A BILL FOR An Act modifying economic development provisions relating to 1 housing and residential development in urban renewal areas. 2 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 3 TLSB 1605HV (2) 91 jm/md

H.F. 1037 Section 1. Section 15A.1, subsection 1, paragraph b, Code 1 2025, is amended to read as follows: 2 b. For purposes of this chapter , “economic development” 3 means private or joint public and private investment involving 4 the creation of new jobs and income or the retention of 5 existing jobs and income that would otherwise be lost or the 6 provision of workforce housing . 7 Sec. 2. Section 15A.1, subsection 2, Code 2025, is amended 8 by adding the following new paragraph: 9 NEW PARAGRAPH . e. Development policies that advance the 10 development of workforce housing. 11 Sec. 3. Section 403.17, subsection 14, Code 2025, is amended 12 to read as follows: 13 14. “Low or and moderate income families” means those 14 families, including single person households, earning no 15 more than eighty percent of the higher of the median family 16 income of the county or the statewide nonmetropolitan area as 17 determined by the latest United States department of housing 18 and urban development, section 8 income guidelines. 19 Sec. 4. Section 403.17, Code 2025, is amended by adding the 20 following new subsection: 21 NEW SUBSECTION . 14A. “Low and moderate income family 22 housing” means housing for low and moderate income families and 23 includes housing that meets the requirements of section 15.353. 24 Sec. 5. Section 403.22, subsection 1, Code 2025, is amended 25 by adding the following new paragraph: 26 NEW PARAGRAPH . d. (1) For municipalities of any population 27 size, and notwithstanding any minimum low and moderate income 28 family housing requirement, if the public improvement project 29 is approved on or after July 1, 2025, and is related to housing 30 and residential development in an economic development area 31 containing property that has been located entirely within the 32 corporate limits of a city for twenty years or more, the amount 33 to be provided for low and moderate income family housing for 34 such projects shall not be required to be greater than an 35 -1- LSB 1605HV (2) 91 jm/md 1/ 3

H.F. 1037 amount equal to twenty percent of the original project cost. 1 (2) In addition, notwithstanding subsection 5, the division 2 of the revenue under section 403.19 for each project under this 3 paragraph shall be limited to tax collections for twenty fiscal 4 years beginning with the second fiscal year after the year in 5 which the municipality first certifies to the county auditor 6 the amount of any loans, advances, indebtedness, or bonds 7 which qualify for payment from the division of the revenue in 8 connection with the project. 9 EXPLANATION 10 The inclusion of this explanation does not constitute agreement with 11 the explanation’s substance by the members of the general assembly. 12 This bill relates to economic development and housing by 13 modifying provisions concerning economic development programs 14 and modifying provisions concerning Iowa’s urban renewal law. 15 The bill amends the definition of “economic development” for 16 purposes of Code chapter 15 to also include the provision of 17 workforce housing. 18 The bill adds development policies that advance the 19 development of workforce housing to the list of factors 20 required to be considered by the public body before public 21 funds are used for grants, loans, tax incentives, or other 22 financial assistance to private persons or on behalf of private 23 persons for economic development under Code chapter 15. 24 Under current law, any urban renewal area established upon 25 the determination that the area is an economic development 26 area, a division of revenue (tax increment financing) shall 27 not be allowed for the purpose of providing or aiding in 28 the provision of public improvements related to housing and 29 residential development, unless the municipality assures that 30 the project will include assistance for low and moderate income 31 family housing, subject to certain municipality population 32 thresholds. 33 Under the bill, for municipalities of any population size, 34 and notwithstanding any minimum low and moderate income family 35 -2- LSB 1605HV (2) 91 jm/md 2/ 3

H.F. 1037 housing requirement, if the public improvement project is 1 approved on or after July 1, 2025, and is related to housing 2 and residential development in an economic development area 3 containing property that has been located entirely within the 4 corporate limits of a city for 20 years or more, the amount to 5 be provided for low and moderate income family housing for such 6 projects shall not be required to be greater than an amount 7 equal to 20 percent of the original project cost. The bill 8 also extends the division of the revenue for such projects to 9 tax collections for 20 fiscal years instead of the current law 10 maximum of 10 years. 11 The bill also defines “low and moderate income family 12 housing” for Code chapter 403 to mean housing for low 13 and moderate income families and housing that meets the 14 requirements of Code section 15.353 (workforce housing). 15 The bill also modifies the defined term “low or moderate 16 income families” in Code chapter 403 to “low and moderate 17 income families” to align with the terminology usage within the 18 Code chapter. 19 -3- LSB 1605HV (2) 91 jm/md 3/ 3