Creating an empower rural Iowa Act to provide incentives for broadband and workforce housing, and including effective date and applicability provisions. Effective 7-1-19, with exception of Division III effective 5-20-19

The bill provides that the broadband grant program shall be designed to reduce or eliminate unserved and underserved areas in Iowa and leverage federal funds and public and private partnerships where possible. The bill removes references to the specified download and upload speeds and date throughout Code chapter 8B and instead references the download and upload speeds identified by the federal communications commission (FCC) pursuant to federal law.1, as described in the bill. Current law provides that the determination of whether a communications service provider facilitates broadband service meeting the requisite download or upload speeds shall be ascertained by reference to certain broadband availability maps or data sources identified by the OCIO by rule. The bill requires the OCIO to periodically make renewed determinations of whether such a provider facilitates broadband service at or above the requisite speeds, including making such determinations prior to each round of grant applications. Current law allows unencumbered or unobligated moneys remaining in the broadband grant fund at the close of the fiscal year to remain available for use until the close of the succeeding fiscal year. The bill instead provides that such moneys shall remain available until three years following the last day of the fiscal year in which the funds were originally appropriated. The bill requires the OCIO open application review process to include an opportunity for public comment on applications. Current law provides certain factors for the OCIO to consider in awarding grants on a competitive basis. The bill modifies such factors for the OCIO to consider in awarding grants and provides that the OCIO shall afford the greatest weight to certain factors, as described in the bill. Current law requires the OCIO to evaluate applications for broadband grants only pursuant to the information provided in an application. The bill allows the OCIO to consider any information obtained during the application process or period for public comment. The bill extends the OCIO broadband grant program from July 1, 2020, to July 1, 2025. Current law requires the OCIO to adopt rules related to the broadband grant program. The bill instead provides the OCIO with discretion to adopt rules deemed necessary to interpret or administer Code chapter 8B, including but not limited to rules relating to the broadband grant program. However, the bill requires the OCIO to adopt rules establishing procedures to allow aggrieved applicants an opportunity to challenge broadband grant awards.1(40) provides owners of broadband infrastructure an exemption from property tax under Code chapter 427, for installations of broadband infrastructure that facilitate broadband service at or above the download and upload speeds specified in Code chapter 8B in targeted service areas commenced and completed on or after July 1, 2015, and before July 1, 2020, for assessment years beginning before January 1, 2022.1. The bill extends the property tax exemption for broadband infrastructure to apply to installations commenced and completed on or after July 1, 2015, and before July 1, 2025, for assessment years beginning before January 1, 2027.1(40) and instead includes by reference the download and upload speeds identified by the FCC. The bill requires a person claiming an exemption to certify that the broadband installation will facilitate broadband service within a targeted service area at or above the download and upload speeds identified by the FCC.1(40) from July 1, 2024, to July 1, 2030. DIVISION III —— WORKFORCE HOUSING TAX INCENTIVE PROGRAM. Division III of the bill modifies the workforce housing tax incentives program. BACKGROUND. Current law provides that the workforce housing tax incentive program (program) administered by the economic development authority (authority) makes tax incentives in the form of investment tax credits and sales and use tax refunds available to housing businesses that complete certain housing projects in Iowa. In order to receive tax incentives, a housing business must apply to the authority and have its housing project registered by the authority, and then must enter into an agreement with the authority (tax incentive agreement) for the successful completion of all requirements of the program. Current law requires a housing business to complete its housing project within three years from the date the housing project is registered by the authority. Upon application by the housing business prior to expiration of the three years, and at the authority’s discretion, a one-time, 12-month extension may be granted. If the housing project is completed and properly examined by a certified public accountant, and all other requirements of the tax incentive agreement and the program are satisfied, the authority may issue a tax credit certificate and the housing business may claim the tax incentives for which it qualifies under the program. Currently, the total tax incentives issued under the program per fiscal year cannot exceed $20 million. Of that $20 million annual cap, $5 million must be reserved for tax incentives issued to housing projects located in small cities, as defined under the program. The program also limits the maximum amount of tax incentives that may be issued per housing project to $1 million. Current law requires the authority to issue tax incentives under the program on a first-come, first-served basis, and in the event the total tax incentives for all registered housing projects completed in a fiscal year exceeds an annual cap, the authority is required to maintain a wait list of completed housing projects, and give those housing projects priority for being issued tax incentives in subsequent fiscal years. BILL CHANGES. The bill amends current law relating to the acceptance of housing project applications by the authority. Current law states that the authority may accept applications on a continuous basis. The bill requires the authority to accept applications during one or more application periods, and provides that housing project applications shall be reviewed and scored on a competitive basis by the authority pursuant to rules adopted by the authority. The bill removes registration of housing projects from the program, and provides that the authority may make tax incentive awards to housing projects. Tax incentive awards shall be subject to the approval of the director of the authority. Applicants who do not receive a tax incentive award are authorized under the bill to make additional applications for that housing project during subsequent application periods. In determining the tax incentive award of a particular housing project, the bill prohibits the authority from using an amount of housing project costs that exceeds the amount included in the housing project application. The bill requires the authority to notify the housing business of its tax incentive award. The notification must include a statement that the housing business has no right to receive a tax incentive certificate or claim a tax incentive until all requirements of the program and the tax incentive agreement are satisfied. The bill amends the requirements related to the tax incentive agreement entered into by the authority and a housing business to provide that such agreement shall identify the tax incentive award amount, the tax incentive award date, the project completion deadline, and the total costs of the housing project.355(2) and may issue a tax credit certificate to the housing business that states the workforce housing investment tax credits that the housing business may claim. The sum of the sales and use tax refund and the amount of the workforce housing investment tax credits cannot exceed the amount of the tax incentive award. The bill also amends the definition of “small city” for purposes of the program. Under current law, the definition of “small city” includes any city or township not located within the most populous counties in the state. If a city is located in more than one county, it is considered to be located in the county having the greatest taxable base within the city. Under the bill, “small city” includes any city or township not located wholly within one or more of the most populous counties in the state, so that any city or township located in whole or in part in one of the least populated counties in Iowa will qualify as a small city under the program. The definition is also amended to provide that population is computed using the most recent population estimates issued by the United States census bureau, instead of the most recent federal decennial census. The bill amends requirements relating to the termination and repayment of tax incentives for failure to comply with the requirements of the program to provide that such failures to comply may also result in the revocation of the tax incentive award. Current law provides only for the reduction, termination, or rescission of an approved tax incentive for failure to comply with the requirements of the program. The bill amends language relating to the calculation of the amount of tax incentives for which a housing project qualifies. Under current law, the amount of the sales and use tax refunds is calculated using the taxes directly related to a housing project, and the amount of the investment tax credits is calculated using a percentage of the qualifying new investment of the housing project. The bill provides that these amounts of taxes or qualifying new investment will only be used in the tax incentive calculation to the extent they were specified in the tax incentive agreement entered into by the authority and the housing business. The program changes described above apply to housing projects that receive a tax incentive award on or after July 1, 2019. Housing projects registered prior to July 1, 2019, shall be governed by current law. The bill provides that the authority shall not award more than $25 million in tax incentives each fiscal year beginning on or after July 1, 2019, and $10 million of that total cap shall be reserved each fiscal year for tax incentive awards made to housing projects located in small cities. For housing projects registered prior to July 1, 2019, the bill states that a tax incentive will be considered awarded when the authority enters into a tax incentive agreement for that housing project as provided under current law, and the bill prohibits a housing business from entering into a tax incentive agreement for such a housing project until the authority allocates tax incentives to that housing project and notifies the housing business that the authority is prepared to execute a tax incentive agreement. The bill also provides that a housing business shall have no right to receive a tax credit certificate or claim a tax incentive for a housing project registered prior to July 1, 2019, until the housing business enters into a tax incentive agreement with the authority. The bill provides two exceptions to the $10 million per year tax incentive reservation for housing projects in small cities. First, if the sum of the amount of tax incentive applications received for housing projects in small cities during a fiscal year, plus the amount of tax incentives eligible for issuance during that same fiscal year to housing projects in small cities registered prior to July 1, 2019, does not exceed $10 million, the authority may award the difference to other housing projects during that same fiscal year. Second, the authority may award less than $10 million of tax incentives to housing projects in small cities during a fiscal year if the difference between the $10 million cap and the amount actually awarded to housing projects in small cities is awarded during the same fiscal year to housing projects registered prior to July 1, 2018. The bill provides that the authority shall give priority in making tax incentive awards to housing projects registered prior to July 1, 2019, and shall create a wait list of housing projects registered prior to July 1, 2019, and place those housing projects on the list in the order the projects were registered. The changes to the awarding and issuance of tax incentives described above apply to housing projects registered prior to July 1, 2019, and to housing projects that receive a tax incentive award on or after July 1, 2019.352, that were registered prior to July 1, 2019.119(2)(g), the authority may allocate the remaining moneys to other qualified housing projects that were registered prior to July 1, 2019.