Relating to economic development and housing by modifying provisions concerning economic development programs and modifying provisions concerning Iowa’s urban renewal law, and including applicability provisions

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 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 percent of the original project cost. The bill also extends the division of the revenue for such projects to tax collections for fiscal years instead of the current law maximum of years.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.19 (tax increment financing). The bill prohibits the foundation property tax from being divided and paid into the municipality’s special fund for the payment of urban renewal indebtedness but instead requires the tax to be levied, collected, and paid to the school district in the same manner as all other property taxes. The exclusion in the bill applies to property taxes due and payable in fiscal years beginning on or after July 1, 2027, that are levied against either of the following: (1) property located in an urban renewal area for which the ordinance providing for a division of revenue takes effect on or after January 1, 2026; or (2) property annexed or otherwise included in an urban renewal area after the effective date of the ordinance providing for a division of revenue if the annexation or inclusion occurs on or after January 1, 2026.22(5) (10 years), after years following the effective date of the bill or after years from the calendar year following the calendar 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 revenue, whichever is later, the amount of taxes that is authorized to be paid into the municipality’s urban renewal special fund shall not exceed percent of the amount otherwise authorized, but for the bill and such excess amounts shall be allocated and paid to the respective taxing districts in the same manner as other taxes.