SF 652

Senate
File
652
-
Introduced
SENATE
FILE
652
BY
COMMITTEE
ON
WAYS
AND
MEANS
(SUCCESSOR
TO
SSB
1214)
A
BILL
FOR
An
Act
relating
to
economic
development
and
housing
by
1
modifying
provisions
concerning
economic
development
2
programs
and
modifying
provisions
concerning
Iowa’s
urban
3
renewal
law,
and
including
applicability
provisions.
4
BE
IT
ENACTED
BY
THE
GENERAL
ASSEMBLY
OF
THE
STATE
OF
IOWA:
5
TLSB
2933SV
(2)
91
jm/md
S.F.
652
DIVISION
I
1
HOUSING
2
Section
1.
Section
15A.1,
subsection
1,
paragraph
b,
Code
3
2025,
is
amended
to
read
as
follows:
4
b.
For
purposes
of
this
chapter
,
“economic
development”
5
means
private
or
joint
public
and
private
investment
involving
6
the
creation
of
new
jobs
and
income
or
the
retention
of
7
existing
jobs
and
income
that
would
otherwise
be
lost
or
the
8
provision
of
workforce
housing
.
9
Sec.
2.
Section
15A.1,
subsection
2,
Code
2025,
is
amended
10
by
adding
the
following
new
paragraph:
11
NEW
PARAGRAPH
.
e.
Development
policies
that
advance
the
12
development
of
workforce
housing.
13
Sec.
3.
Section
403.17,
subsection
14,
Code
2025,
is
amended
14
to
read
as
follows:
15
14.
“Low
or
and
moderate
income
families”
means
those
16
families,
including
single
person
households,
earning
no
17
more
than
eighty
percent
of
the
higher
of
the
median
family
18
income
of
the
county
or
the
statewide
nonmetropolitan
area
as
19
determined
by
the
latest
United
States
department
of
housing
20
and
urban
development,
section
8
income
guidelines.
21
Sec.
4.
Section
403.17,
Code
2025,
is
amended
by
adding
the
22
following
new
subsection:
23
NEW
SUBSECTION
.
14A.
“Low
and
moderate
income
family
24
housing”
means
housing
for
low
and
moderate
income
families
and
25
includes
housing
that
meets
the
requirements
of
section
15.353.
26
DIVISION
II
27
DIVISION
OF
REVENUE
——
SCHOOL
FOUNDATION
LEVY
28
Sec.
5.
Section
403.19,
subsection
2,
paragraph
a,
Code
29
2025,
is
amended
to
read
as
follows:
30
a.
That
portion
of
the
taxes
each
year
in
excess
of
such
31
amount
shall
be
allocated
to
and
when
collected
be
paid
into
a
32
special
fund
of
the
municipality
to
pay
the
principal
of
and
33
interest
on
loans,
moneys
advanced
to,
or
indebtedness,
whether
34
funded,
refunded,
assumed,
or
otherwise,
including
bonds
35
-1-
LSB
2933SV
(2)
91
jm/md
1/
9
S.F.
652
issued
under
the
authority
of
section
403.9,
subsection
1
,
1
incurred
by
the
municipality
to
finance
or
refinance,
in
whole
2
or
in
part,
an
urban
renewal
project
within
the
area,
and
to
3
provide
assistance
for
low
and
moderate
income
family
housing
4
as
provided
in
section
403.22
.
However,
except
as
provided
5
in
paragraph
“b”
,
taxes
for
the
regular
and
voter-approved
6
physical
plant
and
equipment
levy
of
a
school
district
imposed
7
pursuant
to
section
298.2
,
foundation
property
taxes
of
a
8
school
district
imposed
under
section
257.3,
and
taxes
for
the
9
instructional
support
program
of
a
school
district
imposed
10
pursuant
to
section
257.19
,
taxes
for
the
payment
of
bonds
11
and
interest
of
each
taxing
district,
and
taxes
imposed
under
12
section
346.27,
subsection
22
,
related
to
joint
county-city
13
buildings
shall
be
collected
against
all
taxable
property
14
within
the
taxing
district
without
limitation
by
the
provisions
15
of
this
subsection
.
16
Sec.
6.
APPLICABILITY.
This
division
of
this
Act
applies
17
to
property
taxes
due
and
payable
in
fiscal
years
beginning
18
on
or
after
July
1,
2027,
that
are
levied
against
any
of
the
19
following:
20
1.
Property
located
in
an
urban
renewal
area
for
which
the
21
ordinance
providing
for
a
division
of
revenue
takes
effect
on
22
or
after
January
1,
2026.
23
2.
Property
annexed
or
otherwise
included
in
an
urban
24
renewal
area
after
the
effective
date
of
the
ordinance
25
providing
for
a
division
of
revenue
if
the
annexation
or
26
inclusion
occurs
on
or
after
January
1,
2026.
27
DIVISION
III
28
DIVISION
OF
REVENUE
——
CHAPTER
422D
PROPERTY
TAX
LEVY
29
Sec.
7.
Section
403.19,
subsection
2,
paragraph
a,
Code
30
2025,
is
amended
to
read
as
follows:
31
a.
That
portion
of
the
taxes
each
year
in
excess
of
such
32
amount
shall
be
allocated
to
and
when
collected
be
paid
into
a
33
special
fund
of
the
municipality
to
pay
the
principal
of
and
34
interest
on
loans,
moneys
advanced
to,
or
indebtedness,
whether
35
-2-
LSB
2933SV
(2)
91
jm/md
2/
9
S.F.
652
funded,
refunded,
assumed,
or
otherwise,
including
bonds
1
issued
under
the
authority
of
section
403.9,
subsection
1
,
2
incurred
by
the
municipality
to
finance
or
refinance,
in
whole
3
or
in
part,
an
urban
renewal
project
within
the
area,
and
to
4
provide
assistance
for
low
and
moderate
income
family
housing
5
as
provided
in
section
403.22
.
However,
except
as
provided
6
in
paragraph
“b”
,
taxes
for
the
regular
and
voter-approved
7
physical
plant
and
equipment
levy
of
a
school
district
imposed
8
pursuant
to
section
298.2
and
taxes
for
the
instructional
9
support
program
of
a
school
district
imposed
pursuant
to
10
section
257.19
,
taxes
for
the
payment
of
bonds
and
interest
11
of
each
taxing
district,
taxes
for
emergency
medical
services
12
imposed
pursuant
to
chapter
422D,
and
taxes
imposed
under
13
section
346.27,
subsection
22
,
related
to
joint
county-city
14
buildings
shall
be
collected
against
all
taxable
property
15
within
the
taxing
district
without
limitation
by
the
provisions
16
of
this
subsection
.
17
Sec.
8.
APPLICABILITY.
This
division
of
this
Act
applies
18
to
property
taxes
due
and
payable
in
fiscal
years
beginning
on
19
or
after
July
1,
2026.
20
DIVISION
IV
21
LIMITATIONS
ON
DIVISION
OF
REVENUE
22
Sec.
9.
Section
403.19,
subsection
2,
Code
2025,
is
amended
23
by
adding
the
following
new
paragraph:
24
NEW
PARAGRAPH
.
e.
For
urban
renewal
areas
for
which
an
25
ordinance
providing
for
a
division
of
revenue
is
not
limited
26
in
duration
under
section
403.17,
subsection
10,
or
section
27
403.22,
subsection
5,
after
fifteen
years
following
the
28
effective
date
of
this
division
of
this
Act
or
after
fifteen
29
years
from
the
calendar
year
following
the
calendar
year
in
30
which
the
municipality
first
certifies
to
the
county
auditor
31
the
amount
of
any
loans,
advances,
indebtedness,
or
bonds
which
32
qualify
for
payment
from
the
division
of
revenue,
whichever
33
is
later,
the
amount
determined
under
paragraph
“a”
that
may
34
be
paid
into
the
municipality’s
special
fund
shall
not
exceed
35
-3-
LSB
2933SV
(2)
91
jm/md
3/
9
S.F.
652
seventy-five
percent
of
the
amount
otherwise
determined
under
1
paragraph
“a”
but
for
this
paragraph
and
such
excess
amounts
2
shall
be
allocated
and
paid
to
the
respective
taxing
districts
3
in
the
same
manner
as
amounts
under
subsection
1.
However,
4
beginning
with
the
sixth
year
that
such
an
urban
renewal
area
5
is
subject
to
this
paragraph,
the
amount
determined
under
6
paragraph
“a”
that
may
be
paid
into
the
municipality’s
special
7
fund
shall
not
exceed
sixty
percent
of
the
amount
otherwise
8
determined
under
paragraph
“a”
but
for
this
paragraph
and
such
9
excess
amounts
shall
be
allocated
and
paid
to
the
respective
10
taxing
districts
in
the
same
manner
as
amounts
under
subsection
11
1.
12
DIVISION
V
13
URBAN
RENEWAL
AREA
HOUSING
AND
RESIDENTIAL
DEVELOPMENT
14
REQUIREMENTS
15
Sec.
10.
Section
403.22,
subsection
1,
Code
2025,
is
amended
16
by
adding
the
following
new
paragraph:
17
NEW
PARAGRAPH
.
d.
(1)
For
municipalities
of
any
population
18
size,
and
notwithstanding
any
minimum
low
and
moderate
income
19
family
housing
requirement,
if
the
public
improvement
project
20
is
approved
on
or
after
July
1,
2025,
but
before
July
1,
2026,
21
and
is
related
to
housing
and
residential
development
in
an
22
economic
development
area
containing
property
that
has
been
23
located
entirely
within
the
corporate
limits
of
a
city
for
24
twenty
years
or
more,
the
amount
to
be
provided
for
low
and
25
moderate
income
family
housing
for
such
projects
shall
not
be
26
required
to
be
greater
than
an
amount
equal
to
twenty
percent
27
of
the
original
project
cost.
28
(2)
In
addition,
and
notwithstanding
subsection
5,
the
29
division
of
the
revenue
under
section
403.19
for
each
project
30
under
this
paragraph
shall
be
limited
to
tax
collections
for
31
twenty
fiscal
years
beginning
with
the
second
fiscal
year
after
32
the
year
in
which
the
municipality
first
certifies
to
the
33
county
auditor
the
amount
of
any
loans,
advances,
indebtedness,
34
or
bonds
which
qualify
for
payment
from
the
division
of
the
35
-4-
LSB
2933SV
(2)
91
jm/md
4/
9
S.F.
652
revenue
in
connection
with
the
project.
1
DIVISION
VI
2
URBAN
RENEWAL
AREA
LIMITATIONS
3
Sec.
11.
Section
331.403,
subsection
3,
paragraph
b,
Code
4
2025,
is
amended
by
adding
the
following
new
subparagraph:
5
NEW
SUBPARAGRAPH
.
(22)
For
purposes
of
determining
6
compliance
with
section
403.5A,
the
percentage
of
actual
value
7
of
all
property
within
the
county’s
area
of
operation,
as
8
defined
in
section
403.17,
that
is
located
in
an
urban
renewal
9
area
established
by
the
municipality
and
in
effect
for
the
10
applicable
fiscal
year.
11
Sec.
12.
Section
384.22,
subsection
2,
paragraph
b,
Code
12
2025,
is
amended
by
adding
the
following
new
subparagraph:
13
NEW
SUBPARAGRAPH
.
(22)
For
purposes
of
determining
14
compliance
with
section
403.5A,
the
percentage,
of
actual
15
value
of
all
property
within
the
city’s
area
of
operation,
as
16
defined
in
section
403.17,
that
is
located
in
an
urban
renewal
17
area
established
by
the
municipality
and
in
effect
for
the
18
applicable
fiscal
year.
19
Sec.
13.
NEW
SECTION
.
403.5A
Percentage
of
municipal
value
20
within
urban
renewal
areas
——
limitations.
21
For
fiscal
years
beginning
on
or
after
July
1,
2026,
22
and
notwithstanding
any
provision
of
this
chapter
to
the
23
contrary,
each
municipality
shall
be
subject
to
the
following
24
limitations:
25
1.
For
the
fiscal
year
beginning
July
1,
2026,
the
actual
26
value
in
the
aggregate
of
all
property
located
in
urban
27
renewal
areas
established
and
in
effect
for
the
fiscal
year
28
by
a
municipality
shall
not
exceed
ninety-six
and
one-fourth
29
percent
of
the
total
actual
value
of
all
property
within
the
30
municipality’s
area
of
operation.
31
2.
For
each
fiscal
year
beginning
on
or
after
July
1,
2027,
32
but
before
July
1,
2047,
the
actual
value
in
the
aggregate
of
33
all
property
located
in
urban
renewal
areas
established
and
in
34
effect
for
the
fiscal
year
by
a
municipality
shall
not
exceed
35
-5-
LSB
2933SV
(2)
91
jm/md
5/
9
S.F.
652
the
limitation
percentage
of
the
total
actual
value
of
all
1
property
within
the
municipality’s
area
of
operation.
For
2
purposes
of
this
subsection,
the
“limitation
percentage”
for
3
each
fiscal
year
shall
be
a
percentage
equal
to
the
limitation
4
percentage
applicable
under
this
subsection
for
the
immediately
5
preceding
fiscal
year,
or
for
the
fiscal
year
beginning
July
1,
6
2027,
the
percentage
applicable
under
subsection
1,
minus
three
7
and
three-fourths
percent.
8
3.
For
each
fiscal
year
beginning
on
or
after
July
1,
2047,
9
the
actual
value
in
the
aggregate
of
all
property
located
in
10
urban
renewal
areas
established
and
in
effect
for
the
fiscal
11
year
by
a
municipality
shall
not
exceed
twenty
percent
of
the
12
total
actual
value
of
all
property
within
the
municipality’s
13
area
of
operation.
14
EXPLANATION
15
The
inclusion
of
this
explanation
does
not
constitute
agreement
with
16
the
explanation’s
substance
by
the
members
of
the
general
assembly.
17
This
bill
relates
to
economic
development
and
housing
by
18
modifying
provisions
concerning
economic
development
programs
19
and
modifying
provisions
concerning
Iowa’s
urban
renewal
law.
20
DIVISION
I
——
HOUSING.
The
bill
amends
the
definition
of
21
“economic
development”
for
purposes
of
Code
chapter
15
to
also
22
include
the
provision
of
workforce
housing.
23
The
bill
adds
development
policies
that
advance
the
24
development
of
workforce
housing
to
the
list
of
factors
25
required
to
be
considered
by
the
public
body
before
public
26
funds
are
used
for
grants,
loans,
tax
incentives,
or
other
27
financial
assistance
to
private
persons
or
on
behalf
of
private
28
persons
for
economic
development
under
Code
chapter
15.
29
The
bill
also
defines
“low
and
moderate
income
family
30
housing”
for
Code
chapter
403
to
mean
housing
for
low
31
and
moderate
income
families
and
housing
that
meets
the
32
requirements
of
Code
section
15.353
(workforce
housing).
33
The
bill
also
modifies
the
defined
term
“low
or
moderate
34
income
families”
in
Code
chapter
403
to
“low
and
moderate
35
-6-
LSB
2933SV
(2)
91
jm/md
6/
9
S.F.
652
income
families”
to
align
with
the
terminology
usage
within
the
1
Code
chapter.
2
DIVISION
II
——
DIVISION
OF
REVENUE
——
SCHOOL
FOUNDATION
3
LEVY.
The
bill
excludes
the
school
district
foundation
4
property
tax
imposed
under
Code
section
257.3
from
the
division
5
of
revenue
under
Code
section
403.19
(tax
increment
financing).
6
The
bill
prohibits
the
foundation
property
tax
from
being
7
divided
and
paid
into
the
municipality’s
special
fund
for
the
8
payment
of
urban
renewal
indebtedness
but
instead
requires
the
9
tax
to
be
levied,
collected,
and
paid
to
the
school
district
10
in
the
same
manner
as
all
other
property
taxes.
The
exclusion
11
in
the
bill
applies
to
property
taxes
due
and
payable
in
12
fiscal
years
beginning
on
or
after
July
1,
2027,
that
are
13
levied
against
either
of
the
following:
(1)
property
located
14
in
an
urban
renewal
area
for
which
the
ordinance
providing
15
for
a
division
of
revenue
takes
effect
on
or
after
January
16
1,
2026;
or
(2)
property
annexed
or
otherwise
included
in
an
17
urban
renewal
area
after
the
effective
date
of
the
ordinance
18
providing
for
a
division
of
revenue
if
the
annexation
or
19
inclusion
occurs
on
or
after
January
1,
2026.
20
DIVISION
III
——
DIVISION
OF
REVENUE
——
CHAPTER
422D
PROPERTY
21
TAX
LEVY.
The
bill
excludes
property
taxes
for
emergency
22
medical
services
imposed
pursuant
to
Code
chapter
422D
from
23
a
division
of
revenue
(tax
increment
financing)
under
Code
24
section
403.19.
25
The
division
applies
to
property
taxes
due
and
payable
in
26
fiscal
years
beginning
on
or
after
July
1,
2026.
27
DIVISION
IV
——
LIMITATIONS
ON
DIVISION
OF
REVENUE.
Under
the
28
bill,
for
urban
renewal
areas
for
which
an
ordinance
providing
29
for
a
division
of
revenue
is
not
limited
in
duration
under
30
Code
section
403.17(10)
(20
years)
or
Code
section
403.22(5)
31
(10
years),
after
15
years
following
the
effective
date
of
32
this
division
of
the
bill
or
after
15
years
from
the
calendar
33
year
following
the
calendar
year
in
which
the
municipality
34
first
certifies
to
the
county
auditor
the
amount
of
any
loans,
35
-7-
LSB
2933SV
(2)
91
jm/md
7/
9
S.F.
652
advances,
indebtedness,
or
bonds
which
qualify
for
payment
1
from
the
division
of
revenue,
whichever
is
later,
the
amount
2
of
taxes
that
is
authorized
to
be
paid
into
the
municipality’s
3
urban
renewal
special
fund
shall
not
exceed
75
percent
of
the
4
amount
otherwise
authorized,
but
for
the
bill,
and
such
excess
5
amounts
shall
be
allocated
and
paid
to
the
respective
taxing
6
districts
in
the
same
manner
as
other
taxes.
Beginning
with
7
the
sixth
year
that
such
an
urban
renewal
area
is
subject
to
8
this
new
provision,
the
amount
of
taxes
that
is
authorized
to
9
be
paid
into
the
municipality’s
urban
renewal
special
fund
10
shall
not
exceed
60
percent
of
the
amount
otherwise
authorized.
11
DIVISION
V
——
URBAN
RENEWAL
AREA
HOUSING
AND
RESIDENTIAL
12
DEVELOPMENT
REQUIREMENTS.
Under
current
law,
any
urban
renewal
13
area
established
upon
the
determination
that
the
area
is
an
14
economic
development
area,
a
division
of
revenue
(tax
increment
15
financing)
shall
not
be
allowed
for
the
purpose
of
providing
16
or
aiding
in
the
provision
of
public
improvements
related
to
17
housing
and
residential
development,
unless
the
municipality
18
assures
that
the
project
will
include
assistance
for
low
and
19
moderate
income
family
housing,
subject
to
certain
municipality
20
population
thresholds.
21
Under
the
bill,
for
municipalities
of
any
population
size,
22
and
notwithstanding
any
minimum
low
and
moderate
income
family
23
housing
requirement,
if
the
public
improvement
project
is
24
approved
on
or
after
July
1,
2025,
but
before
July
1,
2026,
25
and
is
related
to
housing
and
residential
development
in
an
26
economic
development
area
containing
property
that
has
been
27
located
entirely
within
the
corporate
limits
of
a
city
for
20
28
years
or
more,
the
amount
to
be
provided
for
low
and
moderate
29
income
family
housing
for
such
projects
shall
not
be
required
30
to
be
greater
than
an
amount
equal
to
20
percent
of
the
31
original
project
cost.
The
bill
also
extends
the
division
of
32
the
revenue
for
such
projects
to
tax
collections
for
20
fiscal
33
years
instead
of
the
current
law
maximum
of
10
years.
34
DIVISION
VI
——
URBAN
RENEWAL
AREA
LIMITATIONS.
The
bill
35
-8-
LSB
2933SV
(2)
91
jm/md
8/
9
S.F.
652
amends
Code
chapter
403
to
provide
that
for
the
fiscal
year
1
beginning
July
1,
2026,
the
actual
value
in
the
aggregate
of
2
all
property
located
in
urban
renewal
areas
established
and
3
in
effect
for
the
fiscal
year
by
a
municipality
shall
not
4
exceed
96.25
percent
of
the
total
actual
value
of
all
property
5
within
the
municipality’s
area
of
operation,
as
defined
in
6
Code
section
403.17.
For
each
fiscal
year
beginning
on
or
7
after
July
1,
2027,
but
before
July
1,
2047,
the
percentage
8
limitation
on
the
amount
of
actual
value
of
the
municipality
9
that
may
be
within
urban
renewal
areas
is
reduced
by
3.75
10
percent
each
fiscal
year
until,
starting
with
the
fiscal
11
year
beginning
July
1,
2047,
the
percentage
limitation
is
20
12
percent.
13
The
bill
also
requires
cities
and
counties
to
include,
as
14
part
of
their
urban
renewal
reporting
to
the
department
of
15
management,
the
percentage
of
actual
value
of
all
property
16
within
the
city’s
or
county’s
area
of
operation
that
is
located
17
in
an
urban
renewal
area
established
by
the
municipality
and
in
18
effect
for
the
applicable
fiscal
year.
19
-9-
LSB
2933SV
(2)
91
jm/md
9/
9