HF 1037 (LSB 1605HV (2) 91)

HOUSE FILE 1037

BY  COMMITTEE ON WAYS AND MEANS

(SUCCESSOR TO HF 617)

A BILL FOR

An Act modifying economic development provisions relating to housing and residential development in urban renewal areas.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

    Section 1.  Section 15A.1, subsection 1, paragraph b, Code 2025, is amended to read as follows:
   b.  For purposes of this chapter, “economic development” means private or joint public and private investment involving the creation of new jobs and income or the retention of existing jobs and income that would otherwise be lost or the provision of workforce housing.
    Sec. 2.  Section 15A.1, subsection 2, Code 2025, is amended by adding the following new paragraph:
   NEW PARAGRAPH.  e.  Development policies that advance the development of workforce housing.
    Sec. 3.  Section 403.17, subsection 14, Code 2025, is amended to read as follows:
   14.  “Low or and moderate income families” means those families, including single person households, earning no more than eighty percent of the higher of the median family income of the county or the statewide nonmetropolitan area as determined by the latest United States department of housing and urban development, section 8 income guidelines.
    Sec. 4.  Section 403.17, Code 2025, is amended by adding the following new subsection:
   NEW SUBSECTION.  14A.  “Low and moderate income family housing” means housing for low and moderate income families and includes housing that meets the requirements of section 15.353.
    Sec. 5.  Section 403.22, subsection 1, Code 2025, is amended by adding the following new paragraph:
   NEW PARAGRAPH.  d.  (1)  For municipalities of any population size, and notwithstanding any minimum low and moderate income family housing requirement, if the public improvement project is approved on or after July 1, 2025, and is related to housing and residential development in an economic development area containing property that has been located entirely within the corporate limits of a city for twenty years or more, the amount to be provided for low and moderate income family housing for such projects shall not be required to be greater than an amount equal to twenty percent of the original project cost.
   (2)  In addition, notwithstanding subsection 5, the division of the revenue under section 403.19 for each project under this paragraph shall be limited to tax collections for twenty fiscal years beginning with the second fiscal year after the year in which the municipality first certifies to the county auditor the amount of any loans, advances, indebtedness, or bonds which qualify for payment from the division of the revenue in connection with the project.
EXPLANATION
The inclusion of this explanation does not constitute agreement with
the explanation’s substance by the members of the general assembly.
   This bill relates to economic development and housing by modifying provisions concerning economic development programs and modifying provisions concerning Iowa’s urban renewal law.
   The bill amends the definition of “economic development” for purposes of Code chapter 15 to also include the provision of workforce housing.
   The bill adds development policies that advance the development of workforce housing to the list of factors required to be considered by the public body before public funds are used for grants, loans, tax incentives, or other financial assistance to private persons or on behalf of private persons for economic development under Code chapter 15.
   Under current law, any urban renewal area established upon the determination that the area is an economic development area, a division of revenue (tax increment financing) shall not be allowed for the purpose of providing or aiding in the provision of public improvements related to housing and residential development, unless the municipality assures that the project will include assistance for low and moderate income family housing, subject to certain municipality population thresholds.
   Under the bill, for municipalities of any population size, and notwithstanding any minimum low and moderate income family housing requirement, if the public improvement project is approved on or after July 1, 2025, and is related to housing and residential development in an economic development area containing property that has been located entirely within the corporate limits of a city for 20 years or more, the amount to be provided for low and moderate income family housing for such projects shall not be required to be greater than an amount equal to 20 percent of the original project cost. The bill also extends the division of the revenue for such projects to tax collections for 20 fiscal years instead of the current law maximum of 10 years.
   The bill also defines “low and moderate income family housing” for Code chapter 403 to mean housing for low and moderate income families and housing that meets the requirements of Code section 15.353 (workforce housing).
   The bill also modifies the defined term “low or moderate income families” in Code chapter 403 to “low and moderate income families” to align with the terminology usage within the Code chapter.