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House File 21 - IntroducedA Bill ForAn Act 1relating to revitalization areas by authorizing cities
2and counties to provide property tax exemptions for certain
3property located in areas previously subjected to lending
4discrimination and including applicability provisions.
5BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
1 Section 1. Section 404.1, Code 2021, is amended by adding
2the following new subsection:
3 NEW SUBSECTION. 6. An area that is a federal targeted area,
4as defined in section 404.3C.
5 Sec. 2. Section 404.2, subsection 2, paragraphs h and i,
6Code 2021, are amended to read as follows:
7h. Any tax exemption schedule authorized in section 404.3,
8subsection 5, or section 404.3A, 404.3B, or 404.3C, that shall
9be used in lieu of the schedule set out in section 404.3,
10subsection 1, 2, 3, or 4. In the case of a county, the tax
11schedules used shall only be applicable to property of the type
12for which the revitalization area is zoned at the time the
13county designates the area a revitalization area.
14i. The Unless inapplicable for an area under section 404.3C,
15the percent increase in actual value requirements that shall
16be used in lieu of the fifteen and ten percent requirements
17specified in section 404.3, subsection 8 and in section 404.5.
18This percent increase in actual value requirements shall not be
19greater than that provided in this chapter and shall, except as
20provided in section 404.3C, be the same requirements applicable
21to all existing revitalization areas.
22 Sec. 3. Section 404.3, subsections 5, 8, and 9, Code 2021,
23are amended to read as follows:
245. A city or county may adopt a different tax exemption
25schedule than those allowed in subsection 1, 2, 3, or 4. The
26different schedule adopted shall not allow a greater exemption,
27but may allow a smaller exemption, in a particular year,
28than allowed in the schedule specified in the corresponding
29subsection of this section. A different schedule adopted by a
30city or county shall apply to every revitalization area within
31the city or county, unless the qualified property is eligible
32for an exemption pursuant to section 404.3A, or 404.3B, or
33404.3C, and except in areas of the city or county which have
34been designated as both urban renewal and urban revitalization
35areas. In an area designated for both urban renewal and urban
-1-1revitalization, a city or county may adopt a different schedule
2than has been adopted for revitalization areas which have not
3been designated as urban renewal areas.
48. “Qualified real estate” as used in this chapter and
5section 419.17 means real property, other than land, which
6is located in a designated revitalization area and to which
7improvements have been added, during the time the area was
8so designated, which have increased the actual value by at
9least the percent specified in the plan adopted by the city
10or county pursuant to section 404.2 or if no percent is
11specified then by at least fifteen percent, or at least ten
12percent in the case of real property assessed as residential
13property or which have, in the case of land upon which is
14located more than one building and not assessed as residential
15property, increased the actual value of the buildings to
16which the improvements have been made by at least fifteen
17percent. For revitalization areas governed by section
18404.3C, the percent increase in actual value required to be
19eligible to receive an exemption shall not apply and instead
20the improvement cost requirement under section 404.3C shall
21apply. “Qualified real estate” also means land upon which
22no structure existed at the start of the new construction,
23which is located in a designated revitalization area and upon
24which new construction has been added during the time the area
25was so designated. “Improvements” as used in this chapter
26and section 419.17 includes rehabilitation and additions to
27existing structures as well as new construction on vacant land
28or on land with existing structures. However, new construction
29on land assessed as agricultural property shall not qualify as
30“improvements” for purposes of this chapter and section 419.17
31unless the governing body of the city or county has presented
32justification at a public hearing held pursuant to section
33404.2 for the revitalization of land assessed as agricultural
34property by means of new construction. Such justification
35shall demonstrate, in addition to the other requirements of
-2-1this chapter and section 419.17, that the improvements on
2land assessed as agricultural land will utilize the minimum
3amount of agricultural land necessary to accomplish the
4revitalization of the other classes of property within the
5urban revitalization area. However, if such construction,
6rehabilitation or additions were begun prior to January 29,
71979, or one year prior to the adoption by the city or county
8of a plan of urban revitalization pursuant to section 404.2,
9whichever occurs later, the value added by such construction,
10rehabilitation or additions shall not constitute an increase in
11value for purposes of qualifying for the exemptions listed in
12this section. “Actual value added by the improvements” as used
13in this chapter and section 419.17 means the actual value added
14as of the first year for which the exemption was received.
159. The fifteen and ten percent increase in actual value
16requirements specified in subsection 8 shall apply to every
17revitalization area within a city or county unless different
18percent increases in actual value requirements are required by
19or made inapplicable under this chapter or are adopted in the
20city or county plan as provided in section 404.2. However, a
21city or county shall not adopt different requirements unless
22every revitalization area within the city or county, other
23than those areas governed by section 404.3C, has the same
24requirements and the requirements do not provide for a greater
25percent increase than specified in subsection 8.
26 Sec. 4. NEW SECTION. 404.3C Federal targeted area
27exemption.
281. a. Notwithstanding the schedules otherwise provided
29for in this chapter, a city or county may provide that all
30qualified real estate located in a revitalization area that is
31a federal targeted area is eligible to receive an exemption
32from taxation based on the schedule set forth in subsection 2.
33b. In lieu of the percent increase in actual value
34requirements otherwise applicable for qualified real estate
35under this chapter, in order to be qualified real estate for
-3-1the purposes of this section, the owner of the real property
2must add improvements to the property the cost of which equals
3or exceeds thirty percent of the actual value of the property
4as of the date the area was designated.
52. All qualified real estate described in subsection 1 is
6eligible to receive an exemption from taxation on the total
7actual value of the qualified real estate. The exemption is
8for a period of fifteen years. The amount of the exemption is
9equal to a percent of the actual value of the qualified real
10estate, determined as follows:
11a. For the first year, one hundred percent.
12b. For the second year, ninety-four percent.
13c. For the third year, eighty-eight percent.
14d. For the fourth year, eighty-two percent.
15e. For the fifth year, seventy-six percent.
16f. For the sixth year, seventy percent.
17g. For the seventh year, sixty-four percent.
18h. For the eighth year, fifty-eight percent.
19i. For the ninth year, fifty-two percent.
20j. For the tenth year, forty-six percent.
21k. For the eleventh year, forty percent.
22l. For the twelfth year, thirty-four percent.
23m. For the thirteenth year, twenty-eight percent.
24n. For the fourteenth year, twenty-two percent.
25o. For the fifteenth year, sixteen percent.
263. For purposes of this section, “federal targeted area”
27means an area that has previously been identified by the
28home owners’ loan corporation or similar entity as less
29desirable, declining, hazardous, or risky for mortgage lending
30in accordance with or as the result of implementation of the
31National Housing Act, Pub.L. No.73–479, 48 Stat.1246, the
32United States Housing Act of 1937, Pub.L. No.75–412, 50
33Stat.888, or a subsequent enactment of Congress or successor
34provision of law prior to enactment of Title VIII of the Civil
35Rights Act of 1968, commonly referred to as the Fair Housing
-4-1Act of 1968.
2 Sec. 5. APPLICABILITY. This Act applies to revitalization
3areas established on or after July 1, 2021.
4EXPLANATION
5The inclusion of this explanation does not constitute agreement with
6the explanation’s substance by the members of the general assembly.
7Code chapter 404 authorizes a city to designate an area
8of the city, or a county to designate an area of the county
9outside the boundaries of a city, as a revitalization area,
10if that area meets certain conditions related to the state
11of the property or is appropriate for public improvements or
12development. As the result of such designations, qualified
13real estate within the revitalization area is eligible to
14receive a property tax exemption for a percentage of the actual
15value added by improvements to the property. Under Code
16chapter 404, qualified real estate must meet certain thresholds
17for the amount of actual value added by the improvements to
18receive an exemption under one of several exemption schedules
19with varying durations and percentages of exemption.
20This bill provides an additional option for a city or county
21to provide an exemption to a revitalization area established
22by ordinance that is a “federal targeted area”. The bill
23defines “federal targeted area” to mean an area that has
24previously been identified by the home owners’ loan corporation
25or similar entity as less desirable, declining, hazardous, or
26risky for mortgage lending in accordance with or as the result
27of implementation of the National Housing Act (1934), the
28United States Housing Act of 1937, or a subsequent enactment of
29Congress or successor provision of law prior to enactment of
30the Fair Housing Act of 1968.
31All qualified real estate in a revitalization area that is
32a federal targeted area is eligible to receive an exemption
33from taxation on the total actual value of the qualified real
34estate. The exemption is for a period of 15 years, beginning
35at 100 percent and decreasing by 6 percent each year until
-5-1expiration of the 15-year period.
2In lieu of the percent increase in actual value requirements
3otherwise applicable for qualified real estate under Code
4chapter 404, in order to be qualified real estate for the
5purposes of the bill, the owner of the real property must
6add improvements to the property the cost of which equals or
7exceeds 30 percent of the actual value of the property as of
8the date the area was designated.
9The bill applies to revitalization areas established on or
10after July 1, 2021.
-6-md/jh
2and counties to provide property tax exemptions for certain
3property located in areas previously subjected to lending
4discrimination and including applicability provisions.
5BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
1 Section 1. Section 404.1, Code 2021, is amended by adding
2the following new subsection:
3 NEW SUBSECTION. 6. An area that is a federal targeted area,
4as defined in section 404.3C.
5 Sec. 2. Section 404.2, subsection 2, paragraphs h and i,
6Code 2021, are amended to read as follows:
7h. Any tax exemption schedule authorized in section 404.3,
8subsection 5, or section 404.3A, 404.3B, or 404.3C, that shall
9be used in lieu of the schedule set out in section 404.3,
10subsection 1, 2, 3, or 4. In the case of a county, the tax
11schedules used shall only be applicable to property of the type
12for which the revitalization area is zoned at the time the
13county designates the area a revitalization area.
14i. The Unless inapplicable for an area under section 404.3C,
15the percent increase in actual value requirements that shall
16be used in lieu of the fifteen and ten percent requirements
17specified in section 404.3, subsection 8 and in section 404.5.
18This percent increase in actual value requirements shall not be
19greater than that provided in this chapter and shall, except as
20provided in section 404.3C, be the same requirements applicable
21to all existing revitalization areas.
22 Sec. 3. Section 404.3, subsections 5, 8, and 9, Code 2021,
23are amended to read as follows:
245. A city or county may adopt a different tax exemption
25schedule than those allowed in subsection 1, 2, 3, or 4. The
26different schedule adopted shall not allow a greater exemption,
27but may allow a smaller exemption, in a particular year,
28than allowed in the schedule specified in the corresponding
29subsection of this section. A different schedule adopted by a
30city or county shall apply to every revitalization area within
31the city or county, unless the qualified property is eligible
32for an exemption pursuant to section 404.3A, or 404.3B, or
33404.3C, and except in areas of the city or county which have
34been designated as both urban renewal and urban revitalization
35areas. In an area designated for both urban renewal and urban
-1-1revitalization, a city or county may adopt a different schedule
2than has been adopted for revitalization areas which have not
3been designated as urban renewal areas.
48. “Qualified real estate” as used in this chapter and
5section 419.17 means real property, other than land, which
6is located in a designated revitalization area and to which
7improvements have been added, during the time the area was
8so designated, which have increased the actual value by at
9least the percent specified in the plan adopted by the city
10or county pursuant to section 404.2 or if no percent is
11specified then by at least fifteen percent, or at least ten
12percent in the case of real property assessed as residential
13property or which have, in the case of land upon which is
14located more than one building and not assessed as residential
15property, increased the actual value of the buildings to
16which the improvements have been made by at least fifteen
17percent. For revitalization areas governed by section
18404.3C, the percent increase in actual value required to be
19eligible to receive an exemption shall not apply and instead
20the improvement cost requirement under section 404.3C shall
21apply. “Qualified real estate” also means land upon which
22no structure existed at the start of the new construction,
23which is located in a designated revitalization area and upon
24which new construction has been added during the time the area
25was so designated. “Improvements” as used in this chapter
26and section 419.17 includes rehabilitation and additions to
27existing structures as well as new construction on vacant land
28or on land with existing structures. However, new construction
29on land assessed as agricultural property shall not qualify as
30“improvements” for purposes of this chapter and section 419.17
31unless the governing body of the city or county has presented
32justification at a public hearing held pursuant to section
33404.2 for the revitalization of land assessed as agricultural
34property by means of new construction. Such justification
35shall demonstrate, in addition to the other requirements of
-2-1this chapter and section 419.17, that the improvements on
2land assessed as agricultural land will utilize the minimum
3amount of agricultural land necessary to accomplish the
4revitalization of the other classes of property within the
5urban revitalization area. However, if such construction,
6rehabilitation or additions were begun prior to January 29,
71979, or one year prior to the adoption by the city or county
8of a plan of urban revitalization pursuant to section 404.2,
9whichever occurs later, the value added by such construction,
10rehabilitation or additions shall not constitute an increase in
11value for purposes of qualifying for the exemptions listed in
12this section. “Actual value added by the improvements” as used
13in this chapter and section 419.17 means the actual value added
14as of the first year for which the exemption was received.
159. The fifteen and ten percent increase in actual value
16requirements specified in subsection 8 shall apply to every
17revitalization area within a city or county unless different
18percent increases in actual value requirements are required by
19or made inapplicable under this chapter or are adopted in the
20city or county plan as provided in section 404.2. However, a
21city or county shall not adopt different requirements unless
22every revitalization area within the city or county, other
23than those areas governed by section 404.3C, has the same
24requirements and the requirements do not provide for a greater
25percent increase than specified in subsection 8.
26 Sec. 4. NEW SECTION. 404.3C Federal targeted area
27exemption.
281. a. Notwithstanding the schedules otherwise provided
29for in this chapter, a city or county may provide that all
30qualified real estate located in a revitalization area that is
31a federal targeted area is eligible to receive an exemption
32from taxation based on the schedule set forth in subsection 2.
33b. In lieu of the percent increase in actual value
34requirements otherwise applicable for qualified real estate
35under this chapter, in order to be qualified real estate for
-3-1the purposes of this section, the owner of the real property
2must add improvements to the property the cost of which equals
3or exceeds thirty percent of the actual value of the property
4as of the date the area was designated.
52. All qualified real estate described in subsection 1 is
6eligible to receive an exemption from taxation on the total
7actual value of the qualified real estate. The exemption is
8for a period of fifteen years. The amount of the exemption is
9equal to a percent of the actual value of the qualified real
10estate, determined as follows:
11a. For the first year, one hundred percent.
12b. For the second year, ninety-four percent.
13c. For the third year, eighty-eight percent.
14d. For the fourth year, eighty-two percent.
15e. For the fifth year, seventy-six percent.
16f. For the sixth year, seventy percent.
17g. For the seventh year, sixty-four percent.
18h. For the eighth year, fifty-eight percent.
19i. For the ninth year, fifty-two percent.
20j. For the tenth year, forty-six percent.
21k. For the eleventh year, forty percent.
22l. For the twelfth year, thirty-four percent.
23m. For the thirteenth year, twenty-eight percent.
24n. For the fourteenth year, twenty-two percent.
25o. For the fifteenth year, sixteen percent.
263. For purposes of this section, “federal targeted area”
27means an area that has previously been identified by the
28home owners’ loan corporation or similar entity as less
29desirable, declining, hazardous, or risky for mortgage lending
30in accordance with or as the result of implementation of the
31National Housing Act, Pub.L. No.73–479, 48 Stat.1246, the
32United States Housing Act of 1937, Pub.L. No.75–412, 50
33Stat.888, or a subsequent enactment of Congress or successor
34provision of law prior to enactment of Title VIII of the Civil
35Rights Act of 1968, commonly referred to as the Fair Housing
-4-1Act of 1968.
2 Sec. 5. APPLICABILITY. This Act applies to revitalization
3areas established on or after July 1, 2021.
4EXPLANATION
5The inclusion of this explanation does not constitute agreement with
6the explanation’s substance by the members of the general assembly.
7Code chapter 404 authorizes a city to designate an area
8of the city, or a county to designate an area of the county
9outside the boundaries of a city, as a revitalization area,
10if that area meets certain conditions related to the state
11of the property or is appropriate for public improvements or
12development. As the result of such designations, qualified
13real estate within the revitalization area is eligible to
14receive a property tax exemption for a percentage of the actual
15value added by improvements to the property. Under Code
16chapter 404, qualified real estate must meet certain thresholds
17for the amount of actual value added by the improvements to
18receive an exemption under one of several exemption schedules
19with varying durations and percentages of exemption.
20This bill provides an additional option for a city or county
21to provide an exemption to a revitalization area established
22by ordinance that is a “federal targeted area”. The bill
23defines “federal targeted area” to mean an area that has
24previously been identified by the home owners’ loan corporation
25or similar entity as less desirable, declining, hazardous, or
26risky for mortgage lending in accordance with or as the result
27of implementation of the National Housing Act (1934), the
28United States Housing Act of 1937, or a subsequent enactment of
29Congress or successor provision of law prior to enactment of
30the Fair Housing Act of 1968.
31All qualified real estate in a revitalization area that is
32a federal targeted area is eligible to receive an exemption
33from taxation on the total actual value of the qualified real
34estate. The exemption is for a period of 15 years, beginning
35at 100 percent and decreasing by 6 percent each year until
-5-1expiration of the 15-year period.
2In lieu of the percent increase in actual value requirements
3otherwise applicable for qualified real estate under Code
4chapter 404, in order to be qualified real estate for the
5purposes of the bill, the owner of the real property must
6add improvements to the property the cost of which equals or
7exceeds 30 percent of the actual value of the property as of
8the date the area was designated.
9The bill applies to revitalization areas established on or
10after July 1, 2021.
-6-md/jh