H.F. _____ Section 1. Section 15.352, Code 2026, is amended by adding 1 the following new subsection: 2 NEW SUBSECTION . 9A. “Rehabilitation project” means a 3 proposed housing project eligible to receive workforce housing 4 tax incentives under section 15.353 that meets all of the 5 following requirements: 6 a. The requirements of section 15.353, subsection 1, 7 paragraph “a” . 8 b. The requirements of section 15.353, subsection 2, 9 paragraph “b” . 10 c. The requirements of section 15.353, subsections 3 and 4. 11 d. The single-family dwelling units that will result from 12 the proposed housing project are intended for resale to buyers 13 who will occupy the units as primary residences. 14 Sec. 2. Section 15.354, subsection 4, Code 2026, is amended 15 by striking the subsection and inserting in lieu thereof the 16 following: 17 4. Maximum tax incentives amount. 18 a. In the fiscal year beginning July 1, 2026, and ending 19 June 30, 2027, and for each fiscal year thereafter, the 20 authority shall not award an amount of tax incentives in excess 21 of forty million dollars. 22 b. (1) Of the tax incentives allocated under paragraph “a” , 23 fifty percent of the allocation available in each fiscal year 24 shall be reserved for allocation to qualified housing projects 25 in small cities. 26 (2) Notwithstanding subparagraph (1), if the sum of the 27 amount of tax incentives awarded in a given fiscal year 28 for housing projects located in small cities based on the 29 authority’s review and scoring of applications does not exceed 30 the amount reserved for housing projects located in small 31 cities pursuant to subparagraph (1), the authority may award 32 the remaining amount of tax incentives reserved for housing 33 projects located in small cities to other housing projects 34 during that same fiscal year. 35 -1- LSB 6856YC (1) 91 nls/ko 1/ 4

H.F. _____ c. (1) Of the moneys allocated under paragraph “a” , five 1 thousand dollars shall be reserved to award tax incentives to 2 rehabilitation projects. 3 (2) Of the tax incentives allocated under subparagraph (1), 4 fifty percent of the allocation available in each fiscal year 5 shall be reserved for allocation to rehabilitation projects in 6 small cities. 7 (3) Notwithstanding subparagraph (2), if the sum of the 8 amount of tax incentives awarded in a given fiscal year for 9 rehabilitation projects located in small cities based on 10 the authority’s review and scoring of applications does not 11 exceed the amount reserved for rehabilitation projects located 12 in small cities pursuant to subparagraph (2), the authority 13 may award the remaining amount of tax incentives reserved 14 for rehabilitation projects located in small cities to other 15 rehabilitation projects during that same fiscal year. 16 d. Tax incentives revoked by the authority or irrevocably 17 declined by a housing business before June 30 of the fiscal 18 year following the award may be awarded during the fiscal year 19 the revocation or declination occurs. Tax incentives awarded 20 pursuant to this paragraph shall not be counted against the tax 21 incentives limit established in paragraph “a” . 22 e. The maximum aggregate amount of tax incentives that 23 may be awarded and issued under section 15.355 to a housing 24 business for a housing project or rehabilitation project shall 25 not exceed one million dollars. 26 f. If a housing business qualifies for a higher amount 27 of tax incentives under section 15.355 than is allowed by 28 the limitation imposed in paragraph “e” , the authority and 29 the housing business may negotiate an apportionment of the 30 reduction in tax incentives between the sales tax refund 31 provided in section 15.355, subsection 2, and the workforce 32 housing investment tax incentives provided in section 15.355, 33 subsection 3, provided the total aggregate amount of tax 34 incentives after the apportioned reduction does not exceed the 35 -2- LSB 6856YC (1) 91 nls/ko 2/ 4

H.F. _____ amount in paragraph “e” . 1 EXPLANATION 2 The inclusion of this explanation does not constitute agreement with 3 the explanation’s substance by the members of the general assembly. 4 This bill relates to rehabilitation projects and tax 5 incentives issued under the workforce housing tax incentives 6 program. 7 The bill defines a “rehabilitation project” as a proposed 8 housing project eligible to receive workforce housing tax 9 incentives that includes at least four or more single-family 10 dwelling units, except for a project located in a small city, 11 then two or more single-family dwelling units; consists of 12 the rehabilitation, repair, or redevelopment of dilapidated 13 dwelling units; and the single-family dwelling units resulting 14 from the proposed housing project are intended for resale to 15 buyers who will occupy the units as a primary residence. 16 Under the workforce housing tax incentives program, current 17 law provides that for FY 2026-2027, the economic development 18 authority (authority) shall not award an amount of tax 19 incentives in excess of $36.5 million. For FY 2027-2028, and 20 for each fiscal year thereafter, the authority shall not award 21 an amount of tax incentives in excess of $35 million. 22 Under the bill, for FY 2026-2027, and for each fiscal 23 year thereafter, the authority shall not award an amount 24 of tax incentives in excess of $40 million. Of the $40 25 million, 50 percent ($20 million) shall be reserved for 26 allocation to qualified housing projects in small cities. 27 Additionally, under the bill, of the $40 million, $5 million 28 shall be reserved to award tax incentives to rehabilitation 29 projects. Of the tax incentives for rehabilitation projects, 30 50 percent ($2.5 million) shall be reserved for allocation to 31 rehabilitation projects in small cities. If the sum of the 32 amount of tax incentives awarded in a given fiscal year for 33 housing or rehabilitation projects located in small cities does 34 not exceed the amount reserved for housing or rehabilitation 35 -3- LSB 6856YC (1) 91 nls/ko 3/ 4

H.F. _____ projects located in small cities, the authority may award the 1 remaining amount of tax incentives to other rehabilitation 2 projects during that same fiscal year. 3 The maximum aggregate amount of tax incentives that may be 4 awarded and issued to a housing business for a housing project 5 or a rehabilitation project shall not exceed $1 million. 6 The bill eliminates the requirement that the authority issue 7 tax incentives under the program on a first-come, first-served 8 basis. 9 -4- LSB 6856YC (1) 91 nls/ko 4/ 4